Federal Register, Volume 76, Number 149, August 3, 2011, Pages 46595-47054

Federal Register/Vol. 76, No. 149/Wednesday, August 3, 2011 /Proposed Rules

(5) Daily records which show for each
business day complete details of:
(i) All retail forex transactions that are
futures transactions executed on that
day, including the date, price, quantity,
market, currency pair, delivery date,
and the person for whom such
transaction was made;
(ii) All retail forex transactions that
are option transactions executed on that
day, including the date, whether the
transaction involved a put or call, the
expiration date, quantity, currency pair,
delivery date, strike price, details of the
purchase price of the option, including
premium, mark-up, commission and
fees, and the person for whom the
transaction was made; and
(iii) All other retail forex transactions
executed on that day for such account,
including the date, price, quantity,
currency and the person for whom such
transaction was made.
(6) Other records. Written
acknowledgements of receipt of the risk
disclosure statement required by
240.6(b), offset instructions pursuant
to 240.5(c), records required under
paragraphs (b) through (f) of this
section, trading cards, signature cards,
street books, journals, ledgers, payment
records, copies of statements of
purchase, and all other records, data
and memoranda that have been
prepared in the course of the banking
institution's retail forex business.
(b) Ratio of profitable accounts. (1)
With respect to its active retail forex
customer accounts over which it did not
exercise investment discretion and that
are not retail forex proprietary accounts
open for any period of time during the
quarter, a banking institution shall
prepare and maintain on a quarterly
basis (calendar quarter):
(i) A calculation of the percentage of
such accounts that were profitable;
(ii) A calculation of the percentage of
such accounts that were not profitable;
and
(iii) Data supporting the calculations
described in paragraphs (b)(1)(i) and
(b)(1)(ii) of this section.
(2) In calculating whether a retail
forex account was profitable or not
profitable during the quarter, the
banking institution shall compute the
realized and unrealized gains or losses
on all retail forex transactions carried in
the retail forex account at any time
during the quarter, and subtract all fees,
commissions, and any other charges
posted to the retail forex account during
the quarter, and add any interest income
and other income or rebates credited to
the retail forex account during the
quarter. All deposits and withdrawals of
funds made by the retail forex customer

during the quarter must be excluded

from the computation of whether the
retail forex account was profitable or not
profitable during the quarter.
Computations that result in a zero or
negative number shall be considered a
retail forex account that was not
profitable. Computations that result in a
positive number shall be considered a
retail forex account that was profitable.
(3) A retail forex account shall be
considered "active" for purposes of
paragraph (b)(1) of this section if and
only if, for the relevant calendar quarter,
a retail forex transaction was executed
in that account or the retail forex
account contained an open position
resulting from a retail forex transaction.
(c) Records related to possible
violations of law. A banking institution
engaging in retail forex transactions
shall make a record of all
communications received by the
banking institution or its related persons
concerning facts giving rise to possible
violations of law related to the banking
institution's retail forex business. The
record shall contain: the name of the
complainant, if provided; the date of the
communication; the relevant agreement,
contract, or transaction; the substance of
the communication; and the name of the
person who received the
communication and the final
disposition of the matter.
(d) Records for noncash margin. A
banking institution shall maintain a
record of all noncash margin collected
pursuant to 240.9. The record shall
show separately for each retail forex
customer:
(1) A description of the securities or
property received;
(2) The name and address of such
retail forex customer;
(3) The dates when the securities or
property were received;
(4) The identity of the depositories or
other places where such securities or
property are segregated or held, if
applicable;
(5) The dates on which the banking
institution placed or removed such
securities or property into or from such
depositories; and
(6) The dates of return of such
securities or property to such retail
forex customer, or other disposition
thereof, together with the facts and
circumstances of such other disposition.
(e) Order tickets.
(1) Except as provided in paragraph
(e)(2) of this section, immediately upon
the receipt of a retail forex transaction
order, a banking institution shall
prepare an order ticket for the order
(whether unfulfilled, executed or
canceled). The order ticket shall

include:

(i) Account identification (account or
customer name with which the retail
forex transaction was effected);
(ii) Order number;
(iii) Type of order (market order, limit
order, or subject to special instructions);
(iv) Date and time, to the nearest
minute, the retail forex transaction order
was received (as evidenced by
timestamp or other timing device);
(v) Time, to the nearest minute, the
retail forex transaction order was
executed; and
(vi) Price at which the retail forex
transaction was executed.
(2) Post-execution allocation of
bunched orders. Specific identifiers for
retail forex accounts included in
bunched orders need not be recorded at
time of order placement or upon report
of execution as required under
paragraph (e)(1) of this section if the
following requirements are met:
(i) The banking institution placing
and directing the allocation of an order
eligible for post-execution allocation has
been granted written investment
discretion with regard to participating
customer accounts and makes the
following information available to
customers upon request:
(A) The general nature of the post-
execution allocation methodology the
banking institution will use;
(B) Whether the banking institution
has any interest in accounts which may
be included with customer accounts in
bunched orders eligible for post-
execution allocation; and
(C) Summary or composite data
sufficient for that customer to compare
the customer's results with those of
other comparable customers and, if
applicable, any account in which the
banking institution has an interest.
(ii) Post-execution allocations are
made as soon as practicable after the
entire transaction is executed;
(iii) Post-execution allocations are fair
and equitable, with no account or group
of accounts receiving consistently
favorable or unfavorable treatment; and
(iv) The post-execution allocation
methodology is sufficiently objective
and specific to permit the Board to
verify fairness of the allocations using
that methodology.
(f) Record of monthly statements and
confirmations. A banking institution
shall retain a copy of each monthly
statement and confirmation required by
240.10.
(g) Form of record and manner of
maintenance. The records required by
this section must clearly and accurately
reflect the information required and
provide an adequate basis for the audit
of the information. A banking

institution must create and maintain

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United States. Office of the Federal Register. Federal Register, Volume 76, Number 149, August 3, 2011, Pages 46595-47054. Washington D.C.. UNT Digital Library. http://digital.library.unt.edu/ark:/67531/metadc52326/. Accessed December 20, 2014.