PROVIDERRETAIL e-FX
Regulatory
Roundup
he purpose of the Farm Bill, and the ultimatelyby Felix Shipkevich
the purpose of these rules, was to provideT
adequate customer protection in what has beenJanuary 13, 2010, is a date that many of us in the
unfortunately called “a loosely regulated market.” Likeworld of Forex regulation will not soon forget. On
children waiting for their birthday gifts, registeredthat day, the United States Commodity Futures
US foreign exchange brokers have been impatientlyTrading Commission (“CFTC”), after almost two
waiting for these rules to legitimizing the industry byyears of deliberation, proposed a set of regula-
imposing registration requirements on introducingtions that created a tsunami of outcry in the retail
brokers, CTAs and CPOs. Their impatience, however,foreign exchange market. These long-awaited
was dubiously rewarded with a set of proposedrules were a product of the 2008 Farm Bill that
regulations that, if enacted, would ultimately driveintended to require registration of US introduc-
most of these Forex brokers and their clients abroad.ing brokers, commodity trading advisors and
In an economy already facing with historically highcommodity pool operators. Instead, these 192
unemployment, the set of proposed rules was intendedpages of densely-worded legislation created an
to bring legitimacy, reputation and growth to aninternational uproar due to the CFTC’s efforts to
industry that was already damaged due to the lack ofcurtail leverage limits to historic lows.
regulation and legal loopholes that allowed fraud to
flourish in the first decade of this millennium.
110 | april 2010 e -FOREX
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