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December 01, 2014
Effective Date of Interpretive Notice to NFA Compliance Rules 2-4 and 2-36: Prohibition on the Use of Certain Electronic Funding Mechanisms
The Commodity Futures Trading Commission recently approved NFA's Interpretive Notice entitled "NFA Compliance Rules 2-4 and 2-36: Prohibition on the Use of Certain Electronic Funding Mechanisms." The Interpretive Notice, which becomes effective on January 31, 2015, prohibits NFA Members from permitting customers to fund their futures or forex accounts with a credit card or other electronic methods tied to a credit card (e.g., using a payment facilitator such as PayPal that draws funds from a credit card).
Members may continue to accept other methods of electronic funding, such as a debit card, which draws funds directly from the customer's account at a financial institution. Such funding methods will be accepted provided that the Member is able to distinguish—prior to accepting funds—between an electronic funding method that draws money from the customer's account at a financial institution and a traditional credit card, and be able to reject the credit card before accepting customer funds.
This prohibition applies to new customers, as well as funding made by existing customers, on January 31, 2015.
More information on the Interpretive Notice can be in found in NFA's June 18, 2014 Submission Letter to the CFTC. Questions concerning the Interpretive Notice should be directed to Sarah A. Walsh (312-781-1202 or firstname.lastname@example.org) or Rachel Brandenburg (312-781-1472 or email@example.com).