FDIC Seeks Comment on Rule Governing Retail Forex Transactions
By Meera Louis - May 10, 2011 10:05 AM CT
The Federal Deposit Insurance Corp. will seek comment on a measure that would govern banks’ off- exchange foreign currency transactions with retail customers, part of the agency’s rulemaking under the Dodd-Frank Act.
FDIC board members voted 5-0 at a meeting in Washington today to seek comment on the proposal, which would impose requirements for foreign currency futures and options that would be prohibited as of July 16 in the absence of a rule. The FDIC proposal would cover retail transactions involving individuals with $10 million or less to invest, the agency said.
“These are retail customers who don’t meet a sophisticated investor standard,” FDIC Vice Chairman Martin Gruenberg said at the meeting.
The measure wouldn’t apply to foreign currency forwards or spot transactions that banks engage in with business customers to hedge foreign exchange risk, according to the FDIC’s notice of proposed rulemaking.
Today’s vote by the FDIC board approves sending the measure out for public comment for 30 days after its publication in the Federal Register.
By Meera Louis - May 10, 2011 10:05 AM CT
The Federal Deposit Insurance Corp. will seek comment on a measure that would govern banks’ off- exchange foreign currency transactions with retail customers, part of the agency’s rulemaking under the Dodd-Frank Act.
FDIC board members voted 5-0 at a meeting in Washington today to seek comment on the proposal, which would impose requirements for foreign currency futures and options that would be prohibited as of July 16 in the absence of a rule. The FDIC proposal would cover retail transactions involving individuals with $10 million or less to invest, the agency said.
“These are retail customers who don’t meet a sophisticated investor standard,” FDIC Vice Chairman Martin Gruenberg said at the meeting.
The measure wouldn’t apply to foreign currency forwards or spot transactions that banks engage in with business customers to hedge foreign exchange risk, according to the FDIC’s notice of proposed rulemaking.
Today’s vote by the FDIC board approves sending the measure out for public comment for 30 days after its publication in the Federal Register.