NFA raises required minimum security deposits for certain FX transactions

Maria Nikolova

The Association has determined to increase the minimum security deposits required to be collected and maintained by FDMs for the Norwegian Krone and the Mexican Peso.

The United States National Futures Association (NFA) is changing the requirements for the security deposits for FX transactions with Forex Dealer Members (FDMs).

Let’s note that each Forex Dealer Member has to collect and maintain certain minimum security deposit for each forex transaction between the Forex Dealer Member and its customers and/or eligible contract participant counterparties. At present (before the changes), the required deposits are:

  • (i) 2% of the notional value of transactions in the British pound, the Swiss franc, the Canadian dollar, the Japanese yen, the Euro, the Australian dollar, the New Zealand dollar, the Swedish krona, the Norwegian krone, and the Danish krone;
  • (ii) 5% of the notional value of other transactions;
  • (iii) for short options, the above amount plus the premium received; and
  • (iv) for long options, the entire premium.

The Executive Committee may temporarily increase these requirements under extraordinary market conditions.

Today, the Association said that, in light of the recent volatility in the currency markets, and the margin increases that CME and ICE have implemented with respect to foreign currency futures involving the Norwegian Krone and Mexican Peso, the Executive Committee has determined to increase the minimum security deposits required to be collected and maintained by FDMs under NFA Financial Requirements Section 12 to the following:

  • Norwegian Krone – 7%;
  • Mexican Peso – 10%.

These increases become effective, for both new and existing positions, at 5:00 p.m. CT on March 22, 2020. The changed requirements remain in effect until further notice.

Read this next

Web3

US arrests Yune Wang for role in 911 S5 botnet scam

A global malware network, linked to the theft of $5.9 billion in Covid relief funds and crypto crimes, has been dismantled, the Department of Justice (DOJ) announced today. The network was also involved in child exploitation, bomb threats, and various cyberattacks.

Digital Assets

US Treasury official clarifies stance on crypto mixing services

The Financial Crimes Enforcement Network (FinCEN) proposed a rule last year to classify convertible crypto mixing as a “class of transactions” with primary money laundering concerns.

Fintech

Robinhood sweetens US crypto offering with trading API

Robinhood has launched a cryptocurrency trading application programming interface (API) for users in the United States. The new API caters to seasoned crypto traders by enabling automated trading strategies, allowing users to react quickly to market movements and trends.

blockdag

After Retik Finance’s 67% Drop, Investors Turn to BlockDAG’s 30,000x ROI Potential to Recover Their Losses

Explore how BlockDAG’s $37M presale is drawing investors while Retik Finance collapses to $0.403.

Digital Assets

Terraform Labs and co-founder Do Kwon reach settlement with SEC

Terraform Labs and its co-founder Do Kwon have reached a “settlement in principle” with the U.S. Securities and Exchange Commission (SEC) regarding a fraud case, according to a court filing on Thursday.

Market News, Tech and Fundamental, Technical Analysis

FTSE 100 Index Technical Analysis Report 30 May, 2024

FTSE 100 Index can be expected to rise further toward the next resistance level 8325.00, which reversed the price earlier this month.

Chainwire

Sui and Atoma Bring the Power of AI to dApp Builders

The integration of Atoma adds new capabilities to Sui’s flourishing developer ecosystem with unique AI-querying capabilities.

Digital Assets

Talos incorporates DeFi with Skolem acquisition

Talos has acquired Skolem to enable clients to incorporate DeFi into their workflows in a move that sets a new standard for the digital asset OEMS and PMS.

<