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Banking

Regulation: NFA clamps down on dealers

US regulator the National Futures Association decided not to wait to see what impact an increase in the minimum net capital requirement from $1 million to $5 million would have on its forex dealer members (FDMs).

The increase came into effect on December 21 2007 but before then the NFA had already been clamping down on firms not meeting its criteria.

Among the companies it took emergency enforcement actions against in early December were One World Capital Group and Forex Liquidity. The investigation into One World was prompted by complaints that clients were having difficulty withdrawing funds. In November, the NFA had fined One World $100,000, which was due to be paid by the end of December 2007. An additional fine, payable by February 1 2008, was imposed after it was found that the company had failed to meet minimum adjusted net capital requirements and to maintain books and records. The NFA also found that One World had used deficient promotional material and had failed to adopt and enforce written procedures to supervise the use of its promotional material.

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