Branch office taxes can lead to trouble on Section transfer pricing tax issues where the profits are booked. According to the Dodd-Frank Act , the list of eligible companies who may serve as counterparties to off-exchange retail forex transaction, only U. Trading foreign currencies can be lucrative, but there are many risks. If the foreign account is deemed a foreign affiliate of an existing CFTC-registered FDM, then using the day extension seems inappropriate to me for financial institutions. This site uses Akismet to reduce spam.
CFTC Final Rule: Off-Exchange Retail Forex The Commission’s final rules closely mirrored those of the proposed rules from January, The CFTC rule primarily addresses the amount of leverage retail traders can employ in trading off-exchange .
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While these proposals generally mirror the CFTC Final Rule, minor differences such as dispute resolution vary among regulators. Documents related to these rule proposals can be found below, under Prudential Regulators' Forex Regulation.
According to the Dodd-Frank Act , the list of eligible companies who may serve as counterparties to off-exchange retail forex transaction, only U. Insurance companies are no longer allowed to participate as counterparties. The CFTC stated that regulation of the retail forex space depends on the type of firm which will act as a counterparty. If an SEC registered broker or dealer is handling retail forex will be regulated by that agency.
Financial institutions will be regulated by banking regulators see Prudential Regulators Forex Proposals below. According to the letter:. From and after October 18, , the period of time described in Regulation 4.
On July 14, , the Federal Register published a final rule from the OCC regarding the authorization of national banks, federal branches and agencies of foreign banks, and their operating subsidiaries collectively, national banks to engage in certain off-exchange transactions in foreign currency with retail customers. According to the final rule, such a retail transaction is defined as "a transaction in foreign currency between a national bank and a retail customer that is:.
The rule became effective on July 15, A separate order addressing the expansion of the rules to Federal savings associations appeared in the Federal Register on September 12, The deadline for public comment was May 23, The final rulemaking, as it appeared in the Federal Register on July 14, , can be found below.
Under the proposed rule, retail customers with relationships with a bank, and are not cleared through an exchange, will be required to post a margin of 2 percent in major currencies such as the U. The margin amount would rise to 5 percent of the notional value of the transaction on other currencies, according to a Reuters story on the FDIC rule.
The final rule applies to foreign currency futures, options on futures, and options as these terms are used in the Commodity Exchange Act. The rule would also apply to transactions that are "functionally or economically similar" to futures and options, such as "rolling spot" trades. The biggest concern is upsetting some U. FDMs in the forex dealer coalition are fine on these new rules per this executive.
They expect the RFED change to be fairly easy to accomplish. I see a big problem for foreign forex dealers operating from tax havens. Registration for foreign companies probably requires a U. Branch office taxes can lead to trouble on Section transfer pricing tax issues where the profits are booked.
If the IRS finds trouble with tax haven cheating, it can pounce on these institutions. The final rules are better than expected from the proposed rules. There are many characters in the forex industry that inappropriately blur the lines between education, investment advice, money management and other related services. Many of these forex players may be drawn into registration in some capacity with the NFA and CFTC, perhaps as an IB, and many will want to avoid that registration for many different reasons.
Some may have trouble passing NFA back ground checks. Many will surely have trouble with the conflicts of interest rules too. The attorney and author of this article said to me via email: I say that the enforcement issues are unresolved in our article both because of the practical realities involved in enforcing this rule and because this was just an opinion of one regulator, not of the Agency.
Excellent comment on our FaceBook page: The most knowledgeable was a guy in the compliance dept at the CFTC. He says the rules apply to any brokerage, foreign or domestic, that wants to do business with U.
Apparently the NFA has a list of what it considers the major currencies. In other words, any currency that retail traders are likely to trade will be at I can live with that. Join our Email List to receive special content and event invitations. First Name Last Name Email. You have no items in your shopping cart.
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What is a 'Series 34'
The Series 34 exam—the Retail Off-Exchange Forex Examination—is a National Futures Association (NFA) exam administered by FINRA. The exam consists of 40 scored questions. Candidates have one hour to complete the exam. The passing score is 70%. He has been a National Futures Association Associate Member since April 21, and a Forex Associated Person since October 28, Seung Kim has passed the Series 3, National Commodity Futures Examination; the Series 34, Retail Off-Exchange Forex Examination; and the Series 65, Uniform Registered Investment Adviser Examination/5(7). participate in the retail off-exchange foreign currency market. This brochure focuses on the off-exchange foreign currency market. 2 3. How does the off-exchange currency market work? The off-exchange forex market is .