Passing the Series 34 Retail off-Exchange Forex Examination by Seung Kim (2014, Paperback)
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But when I was asked about the June 1 letter from Phillip Capital CEO Lynette Lim informing customers that the firm would be no longer be offering retail forex, due to a recent ruling by the Securities and Exchange Commission, the conversation went something like this:.
So, how did I miss this? Simple — there was no press release and it was not a rule change per se but rather a notice posted on a Friday afternoon, saying that a previous ruling, which allowed certain registrants to offer retail forex, but with a sunset provision of July 31,would not be renewed. The sun will officially set. First, a little historical context. Inthe CFTC approved its final rules regarding off-exchange retail foreign exchange transactions.
As such, the CFTC has jurisdiction over retail foreign exchange transactions. The SEC was required to put forth its rules for dual what is retail off-exchange forex, or make a determination on what is retail off-exchange forex broker-dealers would be allowed to offer retail forex.
In what is retail off-exchange forex, the SEC issued its temporary rule allowing retail forex, with the sunset. What is retail off-exchange forex the May notice says, essentially, is that broker-dealers, even those dually registered with the CFTC what is retail off-exchange forex primary regulator for retail forexare prohibited from offering or entering into retail forex transactions, except to eligible contract participants, such as institutional customers.
Phillip, which only recently began offering retail forex to its U. A few more dual registrant firms that offer retail forex must either change their product lineup or their entity structure in order to comply. But a number of market-watchers, including me, believe the days are numbered for retail forex in the U.
SEC commissioner Luis Aguilar, in his comments accompanying the ruling, summed up the regulatory view of retail forex quite succinctly:. As dual registrants are removed from the pool, there is concern that the remaining players may widen spreads, reduce transparency, and exacerbate what many in the regulatory community see as an unfair market for retail forex investors.
Call me old-fashioned, but for the retail investor looking for a liquid, transparent foreign exchange market, nothing beats listed futures and options. Doug Ashburn is a former editor-at-large of John Lothian News. He left in late and is now the managing editor of T3 Custom.
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