In the United States of America Forex broker operations must be regulated. Regulation of Forex and futures brokers are divided between specialized agencies. Futures trading market mainly falls under the competence of Commodity Futures Trading Commission (CFTC) and Self-regulatory organization - National Futures Association (NFA). Futures commission merchants and retail foreign exchange dealers acquire CFTC license and also enroll NFA self-regulatory organization.
Regulating agencies set minimum amount threshold of company's proprietary funds, which by today amounts to at least 22 mln US dollars. Apart from that, companies must maintain amount of proprietary funds on the level of 5% from their liabilities above minimal amount. FCM and FRED regulated brokers also must have internal documents and policies regarding internal control, risk management, relationship with clients, as well as position of compliance officer. An important thing about practice of US FOREX companies is that client receives from them a paper form of risk notification, text of which is affirmed by regulating authority.
Apart from a common prohibition on fraudulent manipulations, specific prohibition papers are applied regarding, for example, off-market quotations, extention of Forex spread as well as conducting of transactions without client's warrant containing type of transaction, contract and volume. FCM and FRED brokers must submit all relevant finance papers to CFTC and NFA as well as the compliance information in the form of regular and annual reporting. In its turn, NFA conducts annual examination of activity of all FCM and FRED brokers.
Apart from standards and rules set by regulating agencies towards trades with derivatives, Forex Transaction Reporting Execution Surveillance System ( FORTRESS) is effective for regulated Forex brokers. It is used by NFA as the tool of automatic analysis of FOREX companies' activity and revealing violations. This system notes all clients trades and functions as single register system. Report on conducted trading operation contains all its main figures such as time, open and close quotation, trading volume and other that provide regulating body with an opportunity of automatic revealing of deviations from common market conditions.
Requirements to capital, range of operations available for various categories of clients, leverage allowed for clients as well as regulations are different for FCM and FRED, on the one hand, and stock market dealers, on the other hand. Temporary rule of SEC (U.S. Securities and Exchange Commission) allows insured brokers offering over-the-counter Forex services.
An unalienable feature of American regulating system is the rule setting limits for leverage offered to retail FOREX clients. One might assume that this exactly limitation leads to a certain extend of stagnation of this branch in the USA, because absence of good opportunities related to marginal crediting deprives over-the-counter Forex its main advantage and is not favorable in comparison to other financial markets. So far, total volume of liabilities of retail companies dealing with over-the-counter Forex services in the USA amounts, according to different estimates, about 800 mln. US dollars. Large part of this amount constitute share of liabilities of the 5 largest companies with total number of active clients from 20 to 100 thousand of people.