Foreign Exchange Dealers Coalition

The Foreign Exchange Dealers Coalition (FXDC) is an alliance of the largest U.S. foreign exchange market dealers. The FXDC partnership was formed in the fall of 2007 to pool industry resources to demonstrate the viability of the forex industry and to ensure fair regulation and oversight that does not hamper freedom of choice, innovation or job creation. The Coalition aimed to provide input to the proposals for major regulation changes at the time, including the required registration for RFEDs with the National Futures Association.[1][2]

What is a forex dealer?

A forex dealer provides online trading services to allow individuals to speculate on rapidly changing foreign exchange rates. Forex Dealer Members (FDMs) are regulated by the Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA) in the United States, as well as by national and local regulatory bodies where they conduct business.

Government and self-regulation

The forex industry in the US was unregulated until December 200 with the Commodities Futures Modernization Act.[3] In the U.S., forex firms are members of the CFTC and the self-regulating National Futures Association (NFA), operating under the same guidelines set forth for FCMs in the futures brokerage business.[4] On a regular basis, all forex dealers submit financial reports to its regulators and are subject to lengthy regulatory audits covering everything from marketing practices to employee training regimens. In addition, many of these long-established regulatory bodies extend specific regulations solely to retail forex dealers,[5] such as higher capital requirements,[5] disclosure statements and the requirement that all dealers disclose to customers that their funds may not be safe in the event of bankruptcy.

References

  1. ↑ "Financial Requirements for FCMs and RFEDs". NFA. Retrieved 17 December 2013.
  2. ↑ "Foreign Exchange Controls". Top Forex News. Retrieved 17 December 2013.
  3. ↑ CFTC Commodities Futures Modernization Act
  4. ↑ NFA Broker Listing
  5. 1 2 NFA forex requirements
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