Forex brokers selling products to retail clients should be subject to the same tough rules as operators in derivative markets, a member of the US Commodity Futures Trading Commission said on Wednesday, as the industry faces closer scrutiny from regulators. Sharon Bowen, a Democratic member of the agency that oversees swaps and futures, expressed the view after a sudden jump in the Swiss franc caused heavy losses at retail broker FXCM and the emergency bailout of the firm by a rival.
"I believe the Commodity Futures Trading Commission has an obligation to seriously consider enhancing our regulations of retail foreign exchange dealers," Bowen said.
Earlier in the day, the National Futures Association set higher security deposits for retail clients in three currencies, which reduces leverage in such trades, and therefore the size of any potential losses.
The NFA is a self-regulatory body of the futures industry, but it also looks at retail currency brokers. The CFTC in turn oversees the NFA, and sets the standards within which it operates.