NFA Reminds RFEDs/FDMs and IBs of Capital Requirements

NFA reminded members that retail foreign exchange dealers ("RFEDs," also known as forex dealer members ("FDMs")) and introducing brokers ("IBs") are subject to CFTC capital requirements and must account in their net capital computations for guaranteed obligations and liabilities of subsidiaries or affiliates. The reminder follows on a recent notice of the Joint Audit Committee providing a similar reminder to futures commission merchants.

In particular, NFA reminded RFEDs and IBs that any guaranteed obligation or liability of a subsidiary or affiliate that is not reported through consolidation of the subsidiary or affiliate must be accounted for in their net capital computations under CFTC Rule 1.17(f)(4) ("Minimum financial requirements for futures commission merchants and introducing brokers").