NEWS Forex Facts NFA Announces New Forex Compliance Rule 2-43(b)
NFA Announces New Forex Compliance Rule 2-43(b)
National Futures Association (NFA), forex industry self regulatory organization in United States, announced that it is now following the new Compliance Rule 2-43 regarding forex trading.
· This rule requires that orders be executed First In, First Out (FIFO). FIFO requires that when multiple positions are held in the same currency pair, the position which was first opened will be the first to be closed. Stop loss and limit orders do not comply with FIFO.
· The NFA's stance is that FIFO provides more transparency to customers, offering a more accurate picture of the P/L than viewing the results of individual positions. This brings the forex market more in line with the practices of the futures and equities markets.
What impact does the new rule have on traders?
Traders who trade via forex brokers regulated by NFA will no longer be able to place stop-loss or limit orders. The ability to modify or close trades from “Open Positions” window is also no longer available. This major new rule will go into effect after July 31, 2009.
