Proposed Rule

In July 2007, the New York Stock Exchange merged its member regulation, enforcement and arbitration functions into NASD, which then became the Financial Industry Regulatory Authority ("FINRA"). Since several of NFA's rules and interpretive notices reference NASD, the proposed amendments replace those references with references to FINRA.

The one exception is the supervision section of the interpretive notice entitled "Forex Transactions," where FINRA is added to the NASD reference instead of replacing it. In the context of hiring and retaining employees, the interpretive notice instructs Forex Dealer Members to consider whether an employee has ever been the subject of a regulatory action. Since a regulatory action could be an old action taken by NASD, NFA believes the interpretive notice should list both names.

As mentioned earlier, NFA is invoking the "ten-day" provision of Section 17(j) of the Commodity Exchange Act. NFA intends to make most of the proposed amendments effective ten days after receipt of this submission by the Commission, unless the Commission notifies NFA that the Commission has determined to review the proposal for approval. The changes to Financial Requirements Section 11 and the related sections of the Interpretive Notice entitled "Forex Transactions" will not become effective until December 21, 2007, however, when the requirements in which they are imbedded become effective.