Futures Commission Merchants (FCMs) and Retail Foreign Exchange Dealers (RFEDs)

A Futures Commission Merchant (FCM) is an entity that solicits or accepts orders to buy or sell futures contracts, options on futures, retail off-exchange forex contracts* or swaps and accepts money or other assets from customers to support such orders.

A Retail Foreign Exchange Dealer (RFED) is an entity that acts, or offers to act, as a counterparty to an off-exchange foreign currency transaction with a person who is not an eligible contract participant:

• a futures contract, an option on a futures contract or an option contract (except options traded on a securities exchange); or
• offered or entered into, on a leveraged or margined basis, or financed by the offeror, counterparty or person acting in concert with the offeror or counterparty on a similar basis.

FCMs and RFEDs are required to maintain accounting systems that are similar to those of any other business. Records must be prepared following generally accepted accounting principles.  FCMs and RFEDs must maintain a minimum net capital requirement and adhere to daily and monthly financial reporting requirements.  More...

All FCMs and RFEDs are required to have an anti-money laundering (AML) compliance program in place pursuant to the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001 (Title III), which was signed into law on October 26, 2001.  NFA rules outline the content and scope of this program and NFA has developed numerous resources to assist Members in meeting this regulatory responsibility.  More...

FCMs that offer retail off-exchange foreign currency (forex) products and RFEDs, have specific registration, recordkeeping, reporting, financial and compliance requirements designed to address the issues unique to this off-exchange environment.  More...

*FCMs that are not primarily and substantially engaged in on-exchange futures business activities must be registered as RFEDs to act as the counterparty to a retail off-exchange forex transaction.