National Futures Association (NFA) has ordered Forex Capital Markets LLC (FXCM) to pay a $200,000 fine. FXCM is an NFA Member and Commodity Futures Trading Commission (CFTC) registered retail foreign exchange dealer located in New York City.
The fine was issued to FXCM for conducting business with an unregistered entity and for failing to submit trade data to NFA through NFA's Forex Transaction Reporting Execution Surveillance System (FORTRESS).
FXCM is one of the largest global financial services firm in the foreign exchange sector, with offices in key financial centers in the UK, USA and Hong Kong. Its retail customer trading volume stood at $254 billion in June 2014 and an average of 350,069 retail client trades were conducted per day during the same period.
The Complaint
The complaint against FXCM allegedthat the broker opened an account for Revelation Forex Fund LP which was required to be registered as a CPO and was denied its application. The complaint further alleged that FXCM did not take adequate steps to verify if RFF was qualified for the exemption or if it was properly registered.
In addition, FXCM is accused of failing to submit trade data comprising millions of orders and executions to NFA's FORTRESS system for a seven-month period in 2013.
The Resolution
A spokesperson at FXCM reported that "?FXCM has settled a complaint brought by the NFA relating to charges of doing business with an unregistered entity and for failing to submit certain trade data reports. FXCM has resolved these matters and has taken steps to avoid similar occurrences in the future."
The $200,000 fine comes at a time when NFA investigations into currency rates manipulation by banks and brokerage houses have increased significantly and have led to several Forex brokers closing their doors in North America.
The settlement by FXCM of the current infraction is an indication of the financial strength and integrity of the firm and should not prevent it from continuing to conduct business in the U.S.