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"Trading of OTC Gold And Silver is Prohibited in US Beginning July 15
As a result of the Dodd-Frank Act enacted by US Congress, a new regulation prohibiting US residents from trading over the counter precious metals, including gold and silver, will go into effect on Friday, July 15, 2011.
In conjunction with this new regulation, we must discontinue metals trading for US residents on Friday, July 15, 2011 at the close of trading at 5pm ET. As a result, all open metals positions must be closed by July 15, 2011 at 5pm ET.
We encourage you to wind down your trading activity in these products over the next month in anticipation of the new rule, as any open XAU or XAG positions that remain open prior to July 15, 2011 at approximately 5:00 pm ET will be automatically liquidated." -- from some of the FX Brokers.
There seem to be quite a few changes for the upcoming year. I am wondering what other surprises are in store for the small FX trader.
Can you help answer these questions from other members on NexusFi?
Forex is next.... Depends on how you read this, but currency futures, such as the 6E could be eliminated as well.
Elimination of OTC Forex
Effective 90 days from its inception, the Dodd-Frank Act bans most retail OTC forex transactions. Section 742(c) of the Act states as follows:
…A person [which includes companies] shall not offer to, or enter into with, a person that is not an eligible contract participant, any agreement, contract, or transaction in foreign currency except pursuant to a rule or regulation of a Federal regulatory agency allowing the agreement, contract, or transaction under such terms and conditions as the Federal regulatory agency shall prescribe…
This provision will not come into effect, however, if the CFTC or another eligible federal body issues guidelines relating to the regulation of foreign currency within 90 days of its enactment. Registrants and the public are currently being encouraged by the CFTC to provide insight into how the Act should be enforced. See CFTC Rulemakings regarding OTC Derivatives located at the following [COLOR=#336699]website address[/COLOR], under Section XX – Foreign Currency (Retail Off Exchange). It is essential that OTC forex participants seek professional help to discuss possible operational and regulatory contingency plans.
Well, what did you expect from Dud and Butt Face Fwank...
"Faith is the substance of things hoped for, the evidence of things not seen." --- "Therefore, I Believe it and I will see it. And every day and in every way, I am healthier, wealthier, and wiser."
You are correct, they are not included. When I first read it the word "contracts" was used; It appeared from the wording they were going after all forex related instruments. However, after further research it only focuses on the forex retail.
None of the provisions of the CRA affect forex futures or options traded on exchanges, so trading of foreign currency futures and options on organized exchanges continues to be permitted under existing rules. Similarly, transactions entered into by sophisticated parties (i.e., transactions on the inter-bank market), or conducted through foreign exchange windows (where customers exchange one currency for another) are unaffected by the provisions of the CRA.
"Faith is the substance of things hoped for, the evidence of things not seen." --- "Therefore, I Believe it and I will see it. And every day and in every way, I am healthier, wealthier, and wiser."
