Forex Dealer Firms
Only regulated entities, such as banks, insurance companies, broker-dealers or futures commission merchants ("FCMs"), and affiliates of regulated entities may enter into forex trades with retail customers (e.g., offer online forex trading to customers).
FCMs that offer forex trading services must be registered with the National Futures Association and the U.S. Commodity Futures & Trading Commission ("CFTC") and meet a variety of regulatory requirements, including the requirement to maintain certain minimum net capital amounts. A listing of the largest FCM's is available here on the CFTC's website. These reports must be filed monthly by FCMs. Any person considering opening an account with a Forex trading firm should confirm that the firm is on this list and otherwise properly registered or otherwise legally able to offer forex trading services (e.g., a bank such as Deutsche Bank). With limited exceptions, most retail online trading firms are FCMs and most institutional trading firms are banks.
Currently, each Forex Dealer FCM must maintain "Adjusted Net Capital" equal to or in excess of the greatest of: (i) $10,000,000 through January 16, 2009, $15,000,000 from January 17, 2009 through May 15, 2009, and $20,000,000 from May 16, 2009 forward; (ii) 5% of all liabilities owed to customers ; or (iii) For FCMs, any other amount required by the NFA's rules.
It is widely anticipated that these increasing FCM adjusted net capital requirements will have the effect of forcing many Forex Dealer FCMs to merge, seek additional capital or go out of business.