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Proposed Rule

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PROPOSED AMENDMENTS
(additions are underlined and deletions are stricken through)

BYLAWS

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BYLAW 306. FOREX DEALER MEMBERS.

(a) Except as provided in section (b), Members of NFA are Forex Dealer Members if they are the counterparty or offer to be the counterparty to foreign currency futures and options transactions offered to or entered into with persons that are not eligible contract participants as defined in Section 1a(12) of the Act and that are not executed on or subject to the rules of a contract market, a derivatives transaction execution facility, a national securities exchange registered pursuant to Section 6(a) of the Securities Exchange Act of 1934, or a foreign board of trade.

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INTERPRETIVE NOTICES

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FOREX TRANSACTIONS WITH FOREX DEALER MEMBERS INTERPRETIVE NOTICE

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B. COMPLIANCE RULE 2-36

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5. Communications with the Public and Promotional Material - No Member or Associate shall make any communication with potential or current retail customers that operates as a fraud or deceit; uses a high-pressure approach; or implies that forex transactions are appropriate for all persons. Promotional material used by the Member or Associate shall not deceive the public; contain any material misstatement of fact; mention the possibility of profit unless accompanied by an equally prominent statement of the risk of loss; or include any reference to actual past trading profits without mentioning that past results are not necessarily indicative of future results.

No Member or Associate may represent that forex funds deposited with a Forex Dealer Member are given special protection under the bankruptcy laws.

No Member or Associate may represent that its services are commission free without prominently disclosing how it is compensated in near proximity to that representation.

Members and Associates may not solicit customers based on the leverage available unless they balance any discussion regarding the advantages of leverage with an equally prominent contemporaneous disclosure that increasing leverage increases risk.

Every Member should adopt and enforce written procedures to supervise communications with potential and current retail customers and promotional material. A supervisory employee should review and approve all promotional material.10

All promotional material should be maintained by each Member and be available for examination for the periods specified in the recordkeeping section of this notice, measured from the date of last use.

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10 Under traditional legal principles, Members can also be liable for promotional material promoting forex trading systems developed by third-parties. For example, a Member has direct responsibility for misleading promotional material if the Member prepares or distributes it; has agency responsibility if the system developer is an agent of the Member under established principles of agency law; and has supervisory responsibility if the Member fails to supervise its own employees when linking to a third-party trading system developer's web site, recommending a third-party's trading system, or entering into a referral agreement with a third-party system developer. See Interpretive Notice titled "NFA Bylaw 1101, Compliance Rules 2-9 and 2-29: Guidelines Relating to the Registration of Third-Party Trading System Developers and the Responsibility of NFA Members for Promotional Material That Promotes Third-Party Trading System Developers and their Trading Systems," NFA Manual, paragraph 9055.

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