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ARTICLE · 25 AUGUST 2020

FCM Settles CFTC Charges For Net Capital Rule Violations

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A dually-registered futures commission merchant and retail foreign exchange dealer settled CFTC charges for net capital rule violations.

United StatesFinance and Banking
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A dually-registered futures commission merchant ("FCM") and retail foreign exchange dealer ("RFED") settled CFTC charges for net capital rule violations.

The violations primarily stemmed from charges that the firm included unsecured receivables from a non-qualifying entity in a calculation of its capital and failed to notify NFA or the CFTC of a significant capital withdrawal as required. As a result of failing to notify the CFTC of capital withdrawals, the CFTC found that the FCM violated CFTC Rule 5.7 ("Minimum financial requirements for retail foreign exchange dealers and futures commission merchants offering or engaging in retail forex transactions") and CFTC Rule 1.17 ("Minimum financial requirements for futures commission merchants and introducing brokers"), as well as CFTC Rule 5.6 ("Maintenance of minimum financial requirements by retail foreign exchange dealers and futures commission merchants offering or engaging in retail forex transactions").

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