CFTC requires IBs to be licensed

Is Forex Trading Halal explained by professional Forex trading experts the “ForexSQ” FX trading team.

Is Forex Trading Halal or Haram?

A new proposed rule has been issued by the CFTC to require all IBs (introducing brokers) to get membership in a Registered Futures Association (RFA). This essentially means that they have to become members of the National Futures Association as of right now it is the only RFA. The costs associated with such a transition are surely likely to question some business models.

The proposal is a part of the swap regulations of the Dodd-Frank act and aims at plugging a loop-hole that allowed certain IBs, CPOs and CTAs to avoid the NFA membership requirement. The discussion period on the proposed rule will be the usual 60 days following the publication in the Federal Register.

While it may be prudent for some of these companies to be regulated, this rule could change the IBs landscape. Many smaller companies cannot afford such a transition and will most likely end up being shut out of the US market. We wouldn’t be ruling out further discussions on the matter, but the consequences of the Dodd-Frank act might be haunting the business for a long time ahead.

Is Forex Trading Halal or Haram Conclusion

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