CHICAGO--(http://www.businesswire.com/)--National Futures Association (NFA) announced that its Board accepted a ban on the use of credit cards to fund retail forex and futures accounts. This http://cts.businesswire.com/ct/CT?id...cda28f45c8c10d is subject to acceptance by the Commodity Futures Trading Commission. Although NFA's proposed rule prohibits the use of credit cards to fund both futures and retail forex accounts, NFA determined through its analysis that futures commission merchants currently don't permit this practice.
Since our inception, NFA was committed to protecting shareholders, states NFA President and CEO Dan Roth. Forex and futures markets are equally high-risk and volatile, and individuals who would like to participate should use only risk capital to fund their own accounts. Allowing clients to fund accounts with credit cards encourages them to trade with borrowed money.
This prohibition is a direct outcome of an extensive study by NFA of forex dealer members' business practices. NFA looked at more than 15,000 retail forex accounts also noted that an overwhelming amount of those accounts were financed by small retail clients utilizing a credit card or borrowed capital, and the majority of those accounts were unprofitable.
Over the last ten years, NFA has made significant strides in its regulation of the retail forex markets, Roth says. From the increase in capital requirements to mandating content demands so that all clients could get comprehensive and accurate account info, this suggestion is merely one other very important step to satisfy our mission to protect clients.
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