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NFA Proposes Higher Transparency Rules for Retail Execution

The National Futures Association (NFA) has submitted a
proposed rule to the US Commodity Futures Trading Commission (CFTC) that will
raise transparency levels for retail FX customers when executing in markets.

The proposed rule change, which has the support of the five
Forex Dealer Members (FDMs) under the NFA jurisdiction, will provide retail FX
customers with a framework for obtaining execution information to review the
quality of the execution the customer received compared to that of other
customers at the FDM.

Specifically, the rule states that an FDM will be required,
upon the request of a customer regarding a specific executed FX transaction, to
provide the customer with specified transaction data for the 15 transactions in
the same currency pair that occurred immediately before and after the
customer’s transaction. This information is time-limited to transactions that
occur 15 minutes either side of the transaction.

Each FDM will be required to notify its customers of their
ability to request this information by a notice prominently displayed on the
FDM’s website, on each customer’s trading portal, and on each customer
transaction statement.

FDMs are also required to provide NFA with a copy of any
customer requests and the FDM’s response in the form and manner required by

The rule was approved by NFA’s board on November 17.


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Colin Lambert

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