Targeted Examination Letter on Retail Forex Trading

A study of the expositions of the field of behavioural finance shows you the vastness of biases that can manifest and mess with your trading. Do you have a solid risk management strategy? It goes without saying that the very best in the world at trading are working where the compensation is highest - at banks and hedge funds. The Connors Group, Inc. Many have tested others, and have settled with one that they believe is successful. If the firm did not account for forex transactions in its calculation of net capital and reserve formula, please explain why the firm did not do so. Provide a copy of any documents given to the forex customers that disclosed the firm's capacity in the transactions.

A retail forex transaction includes an agreement, contract, or transaction in foreign currency that is a contract of sale of a commodity for future delivery (or an option on such a contract) or an option (other than an option executed or traded on a national securities exchange registered pursuant to section 6(a) of the Exchange Act) that is.

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Please advise if your firm solicited business for, or introduced customers to, a forex dealer. If so, please describe the due diligence your firm undertook to learn about the forex dealer.

Please advise if your firm retained anyone to solicit forex customers for the firm and, if so, what due diligence your firm undertook to learn about whoever was soliciting the forex customers for your firm. Please provide any documentation obtained as a result of the due diligence. If your firm utilizes exception reports to supervise forex trading, please identify the reports, including the parameters that are used and who generates the reports.

Please describe how the reports are used to supervise forex trading, and identify the person s responsible for utilizing the reports. Please provide a copy of the portions of your firm's Anti-Money Laundering AML Program that addresses the risks associated with forex trading, and that addresses monitoring, detecting, and reporting suspicious activities associated with the forex transactions.

Provide copies of such portions of all previous AML procedures that have been in use since Please describe how, if at all, the firm accounted for forex transactions in its calculations of net capital and reserve formula since first engaging in forex trading. If the firm did not account for forex transactions in its calculation of net capital and reserve formula, please explain why the firm did not do so.

Has your firm received any customer complaints or arbitration claims concerning the forex activities? If so, provide a copy of the complaint s if written or a report of the complaint s if oral, state when made and to whom. Provide copies of account documentation and account statements. The year saw the first generation of forex online trading platforms. As a result, foreign exchange and customers' markets flourished. Web-technology not only allowed retail foreign exchange trading to foster easy and fast ways for customers to access the markets, but also currency pairs while making trades from their own computers.

The software development of trading platforms has seen a number of stages. Initially, trading platforms were based on basic programs downloaded to computers, such as the popular MetaTrader 4. This was followed by the development of easier-to-use interfaces and advanced features such as charting and technical analysis tools. The next stage saw the move to web-based platforms and mobile devices such as tablets and smartphones. Since there has also been a focus on developments to integrate automated trading tools and social trading into the forex trading platforms.

Retail forex trading has been promoted by some as an easy way to make profits and has thus been the focus for a number of foreign exchange frauds. From Wikipedia, the free encyclopedia. The Connors Group, Inc. Retrieved 14 June The Wall Street Journal. Dow Jones and Company. Retrieved 13 December

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Retail Forex transactions once again at the heart of FX benchmark rate fixing case The plaintiffs argue that the plain meaning of “purchase” or “ payment” does not limit the means or methods of the purchase or payment, whether it be cash, check, credit card, debit card, ATM, or wire. August 30, CFTC Releases Final Rules Regarding Retail Forex Transactions Washington, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) today announced the publication in the Federal Register of final regulations concerning off-exchange retail foreign currency transactions. Identify the parties to each forex transaction, i.e. the parties who solicited the forex transactions, the customers, and the institutions to and from which the funds were wired. Please provide this response in a sortable format, such as a Microsoft Excel spreadsheet.