FXDD sets aside $3.3 million as part of NFA pricing investigation
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FXDD, an institutional and retail forex broker, has voluntarily set aside $3.3 million after being asked to do so by independent industry regulator the National Futures Association (NFA) as part of a trade quoting and pricing investigation.
In June, the NFA said a 2011 audit of FXDD’s operations found that there were deficiencies with the company’s record keeping, anti-money laundering programme and treatment of order execution practices.
Chiefly, the NFA alleged FXDD treated price slippage in FX trades through its platforms asymmetrically.
The NFA allegation means that when prices in FX trades through an FXDD platform changed mid-trade, the changes in the pricing benefited FXDD to the detriment of the customers executing the trades.
The NFA business conduct committee says FXDD customers could be owed an estimated $3.3 million as a result of asymmetrical price-slippage practices.
FXDD has now placed the money into an escrow account pending resolution of the NFA investigation into the company.