At OANDA, It's Business as Usual After CFTC Leverage Ruling
NEW YORK, September 2, 2010—OANDA Corporation, provider of innovative online forex trading and currency data services, applauds the U.S. Commodity Futures Trading Commission (CFTC) for setting new rules that will better protect consumers in the retail forex trading industry.
The CFTC's new rules require forex dealers to cap leverage at 50:1 on major currency pairs. They come into effect on October 18, 2010. The 50:1 leverage cap brings the U.S. levels in line with those of other global regulators, including the Monetary Authority of Singapore. Japan's Financial Service Agency was the latest to introduce a 50:1 cap on August 1.
"We are very pleased at the new CFTC ruling, which sets leverage limits on major pairs the same as the limits we already use," said Michael Stumm, CEO of OANDA Corporation. "We value the best interests of our clients, so we have never offered leverage higher than 50:1."
The rules also require CFTC registration of introducing brokers (IBs) and trading advisors, who need to maintain a minimum net capital requirement or enter into a guarantee agreement with a forex broker. Stumm commended the CFTC on its new requirements. "OANDA has never accepted IBs as part of our business practice, and we are strongly supportive of the CFTC in its attempts to bring more accountability to the use of these middlemen," he said.
Stumm assures OANDA clients that the new CFTC regulations will mean business as usual at OANDA. "Our U.S. customers will not be scrambling to find an unregulated offshore broker offering higher leverage because they already accept our 50:1 as reasonable," Stumm said. "We will continue to practice business in the same conservative, transparent way we've always done to provide the best value possible for all our trading clients."
OANDA started in 1995 as the first online provider of comprehensive currency exchange information. Since then the OANDA Rate® has become the benchmark for corporations, tax authorities, auditing firms, and central banks. In 2001 OANDA launched fxTrade, the first fully automated online forex trading platform. fxTrade was the first platform to offer immediate execution, support trades and accounts of any size, enable true 24/7 trading, and eliminate the rollover swap by calculating interest by the second. OANDA's innovative technology has enabled it to sustain a large trading volume. Peak performance has been measured at 1.5 million trades a day, far exceeding the volume typically handled through any of the leading global banks or electronic communication networks (ECNs) that trade forex.
OANDA Corporation is a registered Futures Commission Merchant (FCM) with the U.S. Commodity Futures Trading Commission (CFTC) and is a forex dealer member of the U.S. National Futures Association (NFA). OANDA Corporation owns the following subsidiaries: OANDA Asia Pacific Pte Ltd, regulated by the Monetary Authority of Singapore with a Capital Markets Services license; OANDA Middle East Corporation Ltd., with a license from the Dubai Financial Services Authority (DFSA); and OANDA Canada, regulated by the Investment Industry Regulatory Organization of Canada (IIROC).