Federal Register, Volume 76, Number 149, August 3, 2011, Pages 46595-47054 Page: 46,666
viii, 47054, iii p. ; 28 cm.View a full description of this periodical.
Extracted Text
The following text was automatically extracted from the image on this page using optical character recognition software:
Federal Register/Vol. 76, No. 149/Wednesday, August 3, 2011 /Proposed Rules
retail forex customer's retail forex
accounts during the monthly reporting
period, including: money, securities, or
property received from or disbursed to
such customer; realized profits and
losses; premiums and mark-ups; and
fees, charges, and commissions.
(b) Confirmation statement. Each
banking institution must, not later than
the next business day after any retail
forex transaction, send:
(1) To each retail forex customer, a
written confirmation of each retail forex
transaction caused to be executed by it
for the customer, including offsetting
transactions executed during the same
business day and the rollover of an open
retail forex transaction to the next
business day;
(2) To each retail forex customer
engaging in forex option transactions, a
written confirmation of each forex
option transaction, containing at least
the following information:
(i) The retail forex customer's account
identification number;
(ii) A separate listing of the actual
amount of the premium, as well as each
mark-up thereon, if applicable, and all
other commissions, costs, fees and other
charges incurred in connection with the
forex option transaction;
(iii) The strike price;
(iv) The underlying retail forex
transaction or underlying currency;
(v) The final exercise date of the forex
option purchased or sold; and
(vi) The date the forex option
transaction was executed.
(3) To each retail forex customer
engaging in forex option transactions,
upon the expiration or exercise of any
option, a written confirmation statement
thereof, which statement shall include
the date of such occurrence, a
description of the option involved, and,
in the case of exercise, the details of the
retail forex or physical currency
position which resulted therefrom
including, if applicable, the final trading
date of the retail forex transaction
underlying the option.
(c) Notwithstanding the provisions of
paragraphs (b)(1) through (3) of this
section, a retail forex transaction that is
caused to be executed for a pooled
investment vehicle that engages in retail
forex transactions need be confirmed
only to the operator of such pooled
investment vehicle.
(d) Controlled accounts. With respect
to any account controlled by any person
other than the retail forex customer for
whom such account is carried, each
banking institution shall promptly
furnish in writing to such other person
the information required by paragraphs(a) and (b) of this section.
(e) Introduced accounts. Each
statement provided pursuant to the
provisions of this section must, if
applicable, show that the account for
which the banking institution was
introduced by an introducing broker
and the name of the introducing broker.
240.11 Unlawful representations.
(a) No implication or representation of
limiting losses. No banking institution
engaged in retail foreign exchange
transactions or its related persons may
imply or represent that it will, with
respect to any retail customer forex
account, for or on behalf of any person:
(1) Guarantee such person or account
against loss;
(2) Limit the loss of such person or
account; or
(3) Not call for or attempt to collect
margin as established for retail forex
customers.
(b) No implication of representation of
engaging in prohibited acts. No banking
institution or its related persons may in
any way imply or represent that it will
engage in any of the acts or practices
described in paragraph (a) of this
section.
(c) No Federal government
endorsement. No banking institution or
its related persons may represent or
imply in any manner whatsoever that
any retail forex transaction or retail
forex product has been sponsored,
recommended, or approved by the
Board, the Federal government, or any
agency thereof.
(d) Assuming or sharing of liability
from bank error. This section shall not
be construed to prevent a banking
institution from assuming or sharing in
the losses resulting from the banking
institution's error or mishandling of a
retail forex transaction.
(e) Certain guaranties unaffected. This
section shall not affect any guarantee
entered into prior to the effective date
of this part, but this section shall apply
to any extension, modification or
renewal thereof entered into after such
date.
240.12 Authorization to trade.
(a) Specific authorization required. No
banking institution may directly or
indirectly effect a retail forex
transaction for the account of any retail
forex customer unless, before the
transaction occurs, the retail forex
customer specifically authorized the
banking institution to effect the retail
forex transaction.
(b) A retail forex transaction is
"specifically authorized" for purposes
of this section if the retail forex
customer specifies:
(1) The precise retail forex transaction(2) The exact amount of the foreign
currency to be purchased or sold; and
(3) In the case of an option, the
identity of the foreign currency or
contract that underlies the option.
240.13 Trading and operational
standards.
(a) Internal rules, procedures, and
controls required. A banking institution
engaging in retail forex transactions
shall establish and implement internal
rules, procedures, and controls
designed, at a minimum, to:
(1) Ensure, to the extent reasonable,
that each order received from a retail
forex customer that is executable at or
near the price that the banking
institution has quoted to the customer is
entered for execution before any order
in any retail forex transaction for:
(i) A proprietary account;
(ii) An account in which a related
person has an interest, or any account
for which such a related person may
originate orders without the prior
specific consent of the account owner if
the related person has gained
knowledge of the retail forex customer's
order prior to the transmission of an
order for a proprietary account;
(iii) An account in which a related
person has an interest, if the related
person has gained knowledge of the
retail forex customer's order prior to the
transmission of an order for a
proprietary account; or
(iv) An account in which a related
person may originate orders without the
prior specific consent of the account
owner, if the related person has gained
knowledge of the retail forex customer's
order prior to the transmission of an
order for a proprietary account;
(2) Prevent banking institution related
persons from placing orders, directly or
indirectly, with another person in a
manner designed to circumvent the
provisions of paragraph (a)(1) of this
section; and
(3) Fairly and objectively establish
settlement prices for retail forex
transactions.
(b) Disclosure of retail forex
transactions. No banking institution
engaging in retail forex transactions may
disclose that an order of another person
is being held by the banking institution,
unless the disclosure is necessary to the
effective execution of such order or the
disclosure is made at the request of the
Board.
(c) Handling of retail forex accounts
of related persons of retail forex
counterparties. No banking institution
engaging in retail forex transactions
shall knowingly handle the retail forexto be effected;
46666
account of any related person of another
Upcoming Pages
Here’s what’s next.
Search Inside
This issue can be searched. Note: Results may vary based on the legibility of text within the document.
Tools / Downloads
Get a copy of this page or view the extracted text.
Citing and Sharing
Basic information for referencing this web page. We also provide extended guidance on usage rights, references, copying or embedding.
Reference the current page of this Periodical.
United States. Office of the Federal Register. Federal Register, Volume 76, Number 149, August 3, 2011, Pages 46595-47054, periodical, August 3, 2011; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc52326/m1/80/: accessed March 28, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.