Attention US traders,
The NFA has sent Notice I-16-27 to US brokers requiring an increase in the margin requirements for certain currencies as well as the removal of the increased margin requirement for the Swiss franc that has been in place since 2015:
Below is the full text of the NFA notice:
November 28, 2016
[B]Immediate attention required – Financial Requirement Section 12 – Changes in required minimum security deposits for forex transactions
Increase in required minimum security deposits[/B]
Given the recent volatility in the currency markets, and the margin increases that CME and ICE have implemented with respect to foreign currency futures involving the Mexican peso, Japanese yen, and New Zealand dollar, the Executive Committee has determined to increase the minimum security deposits required to be collected and maintained by FDMs under NFA Financial Requirements Section 12 to the following:
- Mexican peso – 8%
- Japanese yen – 4%[li]New Zealand dollar – 3%
[/li]These increases become effective, for both new and existing positions, at 5 p.m. (CST) on December 5, 2016 and remain in effect until further notice.
Decrease in required minimum security deposits
Given the recent margin decreases that CME and ICE have implemented with respect to foreign currency futures involving the Swiss franc, the Executive Committee has also determined to reduce the minimum security deposit required for currency pairs involving the Swiss franc to 3% (from the current 5% requirement imposed in January 2015). The decrease becomes effective at 5 p.m. (CST) on December 5, 2016 and remains in effect until further notice.
If you have any questions on these requirements, please contact Sarah Walsh, Associate Director, Compliance (email@example.com or 312-781-1202) or Nicole Wahls, Manager, Compliance (firstname.lastname@example.org or 312-781-1886).[/I]
In order to comply with the NFA notice, FXCM US is raising margin requirements on MXN, JPY, and NZD pairs at approximately 5:00pm EST on Monday, December 5, 2016. FXCM US will also be decreasing margin requirements on CHF to 3% from the current 5% requirement imposed in January 2015.
Again, this NFA notice applies only to the US, so margin requirements for accounts with FXCM UK and FXCM Australia are not affected. We urge all clients to proceed cautiously as market moves may be large and unpredictable. Up-to-date margin requirements (per 1K lot) are displayed in the Simplified Dealing Rates window of Trading Station.
Remember that forex trading can result in losses that could exceed your deposited funds and therefore may not be suitable for everyone, so please ensure that you fully understand the high level of risk involved.