Forex Brokers Will Be Affected

Forex brokers will feel the affects of the amendments to NFA financial requirements section 11 and the interpretive notice entitled "Forex Transactions."  These amendments go into affect on December 21st, 2007.  

• New net capital requirement a minimum of $10 million or 10% of client assets for forex brokers offering greater than 100:1 leverage.
• New net capital requirement of $5 million or 5% of client assets are for FDM’s offering 50:1 leverage or less.
• In addition to the new net capital minimum, there are other financial requirements. They vary, depending on size of positions taken by a firm as well as the amount of customer deposits held. These new requirements will make the actual requirement much larger for a number of FDMs.  

I don't know if the smaller forex broker will be able to survive these requirements.  I'm sure we'll see for ourselves come December.

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