Goverment-Forex Trade

Government and self-regulationFor many years, the foreign exchange industry was unregulated in theUnited States. Regulation was long overdue, especially in light of thefact that foreign exchange trading had been regulated in such localesas Hong Kong and London for over a decade. Some rules were formally putin place when the President signed and Congress passed the CommoditiesFutures Modernization Act[4] in December of 2000, which regulated theretail foreign exchange industry for the first time.In the U.S., forex firms [5]are members of the CFTC [6]and theself-regulating National Futures Association (NFA) [[7]], operatingunder the same guidelines set forth for FCMs in the futures brokeragebusiness. As part of a global financial community, leading forexdealing firms [8][9][10][11]are also regulated in multiple countrieswithin five continents. Each firm welcomes regulation and adheres tostrict global and local guidelines and net capital requirements toensure that all business operations meet necessary rules andregulations. Other developed countries have effectively regulated theOTC foreign exchange market, and each member believes that the U.S. cando this as well.