The National Futures Association (NFA) has ordered Forex Capital Markets (FXCM), a registered retail foreign exchange dealer located in New York City, to pay a USD200,000 fine.
NFA issued the fine to FXCM for conducting business with an unregistered entity that was required to be registered with the CFTC as a commodity pool operator (CPO) and an NFA member, and for failing to submit trade data to NFA through NFA's Forex Transaction Reporting Execution Surveillance System (FORTRESS).
The Decision, issued by NFA's Business Conduct Committee, is based on a complaint and a settlement offer submitted by FXCM.
The complaint alleged that FXCM opened an account for Revelation Forex Fund. Revelation Forex Fund's general partner, RFF GP, was required to be registered as a CPO and had filed an exemption from registration under CFTC Regulation 4.13(a)(3) for which it did not qualify. The complaint alleged that FXCM did not take adequate steps to determine if Revelation Forex Fund qualified for the exemption or if RFF was properly registered.
Additionally, the complaint alleged that FXCM failed to submit trade data to NFA's FORTRESS system for a seven-month period in 2013 from at least two of its trading servers. This data comprised millions of orders and executions. Also, in January and April 2014, FXCM failed to report adjustments to FORTRESS within 24 hours as required pursuant to NFA rules.
FXCM neither admitted nor denied the allegations in the complaint.