Forex 1 Teil In Der Messung

Definition eines Lot in Forex Ein Forex-Lot ist ein Handelsbegriff verwendet, um die Größe einer Handelsposition in Forex mit Bezug auf einen Standard von 100.000 Einheiten der Basiswährung zu beschreiben. Die Benchmark für Devisengeschäfte beträgt 100.000 Einheiten der Basiswährung, und da diese Handelsgröße der Standard ist, gegen den andere Handelsgrößen gemessen werden, wird dies als ein Standardlos bezeichnet. Dem Standardlot wird daher ein Wert von 1,0 zugewiesen und es entspricht einer Positionsgröße von 100.000 Einheiten der Basiswährung, in der das Händlerkonto geführt wird. Trade Größen können viel mehr oder viel weniger als ein Standard-Los. Deswegen gibt es Unterabschnitte des Standard-Loses wie folgt: a) Ein Zehntel des Standard-Loses, das als Mini-Lot bekannt ist. Dies entspricht einer Positionsgröße von 10.000 Einheiten der Basiswährung des Kontos mit einer minimalen Losgröße von 0,1 Losen. Mini-Losmessungen beginnen daher von 0,1 Losen zu 0,99 Losen. B) Einhundertstel eines Standard-Loses, bekannt als Micro-Lot. Dies entspricht einer Positionsgröße von 1.000 Einheiten der Basiswährung des Kontos mit einer Losgröße von 0,01 Losen. Micro Los Messungen beginnen von 0,01 Lose bis 0,099 Lose oder 0,1 Minilosen zu 0,99 Mini-Losen. C) In letzter Zeit haben einige Broker mit Positionsgrößen kommen, die sogar kleiner als ein Mikro-Los sind, und sie gehen durch mehrere Namen. Allerdings sind diese nicht standardisiert und neigen dazu, von einem Broker zu einem anderen zu unterscheiden. So werden wir mit den Standard-Definitionen der Standard Lot, Mini Lot und Micro Lot Stick bleiben. Alle anderen Handelsgrößen werden in Vielfachen des Standard-Loses oder Unterteilungen des Loses / Vielfache des Micro-Loses oder des Mini-Loses ausgedrückt. Der finanzielle Wert von Forex Lots Lots in Forex werden verwendet, um eine Messung des Handelsvolumens einer Devisenhandel Position zuzuweisen. In der Erwägung, dass der Wert einer Handelsposition sowie die Bewegung des Währungspaares in Pips ist, was bestimmt die Höhe der Gewinne oder Verluste nach einem Forex-Handel, was ist der monetäre Wert der Forex-Los Wir nehmen an, dass die Basiswährung ist US Dollar. A) Standard Lots sind im Wert von 10 pro Pip auf Währungspaare, die nicht den japanischen Yen enthalten. Dies wird durch Multiplizieren der Positionsgröße eines Standard Lot (100.000) mit 1 Pip (0,0001 Punkten) abgeleitet. 100.000 X 0.0001 10. b) Miniloten sind 1 pro Pip (10.000 x 0.0001) c) Mikro-Lots sind 0,1 (10 Cent) pro Pip, als 1000 X 0,0001 0,1 Alle anderen Messungen des Wertes einer Pip-Dose Nach diesen Formeln berechnet werden. So wird ein Handel, der 0.55 Lose verwendet, 55.000 X 0.0001 5.50 pro Pip wert sein. Warum Forex-Lots sind wichtig Der Wert der Forex-Lot auf ein Gewerbe angewendet haben einen Einfluss auf das Risikoprofil für das Konto. Das Risiko für ein Konto ist eine Funktion der Kontogröße, Stop-Loss. Währung gehandelt, Risiko Prozentsatz angewendet und die Losgröße. Dies ist in dieser Demonstration mit einem Forex-Position Größenrechner gezeigt. Ein Händler hat 2.500 in forex Kapital, will 3 Risiko und einen Stopverlust von 50 Pips verwenden. Welche Losgröße sollte verwendet werden, um sein Konto davon abzuhalten, zu viel Risiko ausgesetzt zu werden Wir verweisen auf einen Positionsgrößenrechner, um die Mathematik für uns zu tun: Wir können deutlich sehen, dass der Händler nur maximal 15 Mikrochargen verwenden kann (0,15 Lose ) Für diesen Handel. Wenn der Trader beabsichtigt, mehr als einen Handel zu nehmen, dann muss die Losgröße durch die Anzahl der Trades geteilt werden, um mit einer neuen Losgrößenmessung zu kommen, die an den Grenzen des Risikos bleibt. Wir können sehen, dass die Forex-Los ist ein integraler Bestandteil dessen, was Händler müssen, bevor Sie an einen Handel. Händler müssen Losgrößen verwenden, die den annehmbaren Risikolimiten entsprechen. Losgrößen müssen daher bei der Auswahl eines Maklers berücksichtigt werden, bei der Finanzierung des Kontos und auf jeden Fall, bevor es eine Handelsposition einnimmt. Broker Wahl ist wichtig, da einige Broker dürfen nur bestimmte Handelsgrößen auf ihrer Plattform. Wenn ein Händler mit 1.000 eine Plattform wählt, in der Mini-Lots die minimale Positionsgröße sind, die gehandelt werden kann, dann ist das Konto stark unter Risiken und könnte einen Margin Call erleiden. Ausreichende Mittel werden auch benötigt, um bestimmte Ebenen der Forex-Position Sizing zu übernehmen. Aus unserem Rechner werden wir sehen, dass, wenn der gleiche Trader, den wir in unserem Beispiel verwendet hatten, 6.000 zu handeln, dann könnte höhere Position Größen verwendet werden. Das Verständnis der Forex-Los ist der Schlüssel zum Erfolg des Handels. Lernen, nutzen und profitieren. Kontaktieren Sie uns Sitemap Affiliate-Programm Copyright Risikohinweis: Der Handel mit Finanzinstrumenten trägt ein hohes Risiko für Ihr Kapital mit der Möglichkeit, mehr als Ihre ursprüngliche Investition zu verlieren. Der Handel mit Finanzinstrumenten ist möglicherweise nicht für alle Anleger geeignet und ist nur für Personen ab 18 Jahren gedacht. Bitte achten Sie darauf, dass Sie sich der Risiken bewusst sind und ggf. eine unabhängige Finanzberatung anstreben. Lesen Sie auch unsere Lernmaterialien und Risikohinweise. Haftungsausschluss: Der Inhaber der Website ist nicht verantwortlich für jegliche Haftung für Verluste, Haftung, Schäden (direkte, indirekte oder Folgeschäden), Personenschäden oder Kosten jeglicher Art, die Ihnen oder einem Dritten entstanden sind (Einschließlich Ihrer Firma), die als Folge oder direkt oder indirekt auf Ihren Zugang und die Nutzung der Website zurückzuführen sind, alle Informationen auf der Website 2015 Investoo, All rights reserved. Retail Devisengeschäfte Enhanced Content - Dokument Werkzeuge Diese Tools helfen Ihnen, das offizielle Dokument besser zu verstehen und helfen beim Vergleichen der Online-Ausgabe mit der Druckversion. Diese Markup-Elemente ermöglichen dem Benutzer zu sehen, wie das Dokument folgt dem Dokument Drafting Handbook, die Agenturen verwenden, um ihre Dokumente zu erstellen. Diese können nützlich sein, um besser zu verstehen, wie ein Dokument strukturiert ist, aber nicht Teil des veröffentlichten Dokuments selbst sind. Verbesserte Inhalte - Dokumentenwerkzeuge Verbesserte Inhalte - Entwicklerwerkzeuge Das Amt des Rechnungsprüfers (OCC) erlässt eine endgültige Regelung, mit der nationale Banken, Zweigniederlassungen und Agenturen ausländischer Banken sowie deren operative Tochtergesellschaften ermächtigt werden, außerbörsliche Geschäfte zu tätigen Fremdwährung mit Einzelkunden. Die Regel beschreibt auch verschiedene Anforderungen, mit denen nationale Banken, Zweigniederlassungen und Agenturen von ausländischen Banken, und ihre operativen Tochtergesellschaften, um diese Geschäfte durchführen müssen. Diese Regel gilt ab 15. Juli 2011. Weitere Informationen WEITERE INFORMATIONEN KONTAKT: Tena Alexander, Senior Counsel, oder Roman Goldstein, Attorney, Securities and Corporate Practices, (202) 874-5120. Ende Weitere Infos Ende Preamble Start Zusätzliche Informationen ZUSÄTZLICHE INFORMATIONEN: I. Hintergrund Am 21. Juli 2010 unterzeichnete Präsident Obama das Dodd-Frank Wall Street Reform - und Verbraucherschutzgesetz (Dodd-Frank Act). 1 In der Fassung des Dodd-Frank-Gesetzes 2 sieht das Commodity Exchange Act (CEA) vor, dass ein US-Finanzinstitut, für das es eine Bundesregulierungsbehörde gibt, keine Transaktion abschließen oder anbieten darf § 2 (c) (2) (B) (i) (I) des CEA mit einem Einzelhandelskaufvertrag 5, außer gemäß einer Vorschrift oder Regulierung einer Bundesaufsichtsbehörde, die das Geschäft nach Maßgabe dieser Bedingungen zulässt Ist vorgeschrieben 6 (a ldquoretail forex rulerdquo). Abschnitt 2 (c) (2) (B) (i) (I) schließt ldquoan Vereinbarung, Vertrag oder Transaktion in Fremdwährung ein, die ein Kaufvertrag für eine künftige Lieferung ist (oder eine Option auf einen solchen Vertrag) oder Eine Option (mit Ausnahme einer Option, die an einer nationalen Wertpapierbörse gehandelt oder gehandelt wird, die gemäß § 6 (a) des Securities Exchange Act von 1934 (15 USC 78 f (a)) registriert ist.) Rdquothinsp 7 A Federal regulatory agencys Einzelhandel Forex Regel muss 8 Retail-Forex-Regeln müssen angemessene Anforderungen in Bezug auf Offenlegung, Aufbewahrung, Kapital und Marge, Berichterstattung, geschäftliche Verhaltensweisen vorschreiben. Diese Regeln gelten für alle Futures und Optionen Und Dokumentationsanforderungen und kann auch andere Normen oder Anforderungen enthalten, die von der Bundesregulierungsbehörde als notwendig erachtet werden 9 Diese Dodd-Frank-Gesetzesänderung zum CEA tritt drei Tage nach Inkrafttreten des Gesetzes in Kraft. 10 Ab dem 16. Juli 2011 dürfen nationale Banken, Zweigniederlassungen und Vertretungen ausländischer Banken sowie ausländische Banken und operierende Tochtergesellschaften (im Folgenden: nationale Banken) keine Einzelhandelsgeschäfte tätigen OCC. Darüber hinaus wird das OCC am 21. Juli 2011 die entsprechende Bundesbankagentur für Bundessparverbände werden. 11 Die OCC plant die Regulierung von Devisenhandelsgeschäften, die von Bundesspa - ranzverbänden unter den gleichen Bedingungen wie in dieser Regel geleistet werden. Allerdings kann die OCC bis zum 21. Juli 2011 keine Regelungen für die Bundessicherungsvereine erlassen. Daher geht die OCC davon aus, dass zu diesem Zeitpunkt eine Zwischenfinanzregelung mit der Bitte um eine öffentliche Stellungnahme vorgesehen ist, die den Geltungsbereich dieser Verordnung auf die Bundessparkassen ausweitet. II. Überblick über die vorgeschlagene Regel und die damit zusammenhängenden Maßnahmen Am 10. September 2010 erließ die Commodity Futures Trading Commission (CFTC) eine Retail-Forex-Regel für Personen, die ihrer Rechtshoheit unterliegen. 12 Am 22. April 2011 schlug das OCC eine Retail-Forex-Regel für nationale Banken vor, die auf der CFTC-Retail-Forex-Regel modelliert waren. 13 Das OCC beschloss, seine Einzelhandelsforschungsregel auf die CFTC-Regel zu modellieren, um die Vergleichbarkeit der Regelungen zu fördern und weil die CFTC ihre Retail-Forex-Regel mit dem Vorteil von über 9.100 Kommentaren aus einer Reihe von Kommentaren, einschließlich Einzelpersonen, die Forex, Intermediäre und CFTC-Registranten handeln, entwickelt hat Die derzeit als Kontrahenten im Handel mit Devisengeschäften, Handelsvereinigungen oder Koalitionen von Industrieteilnehmern, einem Komitee einer Kreisanwaltsvereinigung, einer eingetragenen Futures-Vereinigung und zahlreichen Anwaltskanzleien, die institutionelle Kunden vertreten, dienen. Das OCC schlug vor, nationale Banken zu ermächtigen, in Retail-Devisengeschäften tätig zu werden und diese Transaktionen den Anforderungen bezüglich Offenlegung, Aufbewahrung, Kapital und Marge, Berichterstattung, Geschäftsverhalten und Dokumentation zu unterziehen. Am 17. Mai 2011 schlägt die Federal Deposit Insurance Corporation (FDIC) die Einführung einer Retail-Forex-Regel für Unternehmen vor, für die sie die entsprechende Bundesbankagentur nach dem Federal Deposit Insurance Act ist. 14 Die OCC - und FDIC-Vorschläge waren im Wesentlichen ähnlich. III. Anmerkungen zur vorgeschlagenen Regel Der Kommentarzeitraum für die vorgeschlagene OCC-Handelsforschungsregel endete am 23. Mai 2011. Der OCC erhielt bis dahin insgesamt drei Stellungnahmen. Von diesen wurde eine von einer großen Bank eingereicht, die im Einzelhandel Forex-Transaktionen (der Kommentator) engagiert und zwei von Einzelpersonen eingereicht wurden. Die beiden letztgenannten Kommentare beziehen sich nicht auf den Vorschlag. Der Kommentator unterstützte im Allgemeinen die vorgeschlagene OCC-Regel, während er bestimmte Klärungen und Änderungen anforderte. Die Kommentare von Kommentaren zu einzelnen Abschnitten des Vorschlags werden in der nachstehenden Abschnitt-nach-Abschnitt-Analyse behandelt. Angesichts der eingegangenen Stellungnahmen ist die endgültige Regelung größtenteils ähnlich der vorgeschlagenen Regelung. Die wesentlichen Änderungen sind in der Section-by-Section-Analyse beschrieben. In der Präambel des Vorschlags hat das OCC darauf hingewiesen, dass Retail-Devisengeschäfte der Interagency-Erklärung über die Einzelhandelsumsätze von Nondeposit Investment Products (NDIP Policy Statement) unterliegen. 15 Die NDIP-Grundsatzerklärung legt Leitlinien für die Erwartungen der OCC fest, wenn eine nationale Bank den Verkauf von Nicht-Depot-Anlageprodukten an Privatkunden tätigt. Die NDIP Policy Statement behandelt Fragen wie Offenlegung, Eignung, Verkaufspraktiken, Kompensation und Compliance. In dem Vorschlag bat das OCC um eine Stellungnahme zu der Frage, ob die Anwendung der NDIP-Richtlinienerklärung Probleme aufgestellt hat, die das OCC ansprechen sollte. Der Kommentator sagte, dass die NDIP Policy Statement sollte nicht gelten für Retail-Forex-Transaktionen, behauptet, dass die Retail-Forex-Regel allein würde ausreichen, um Einzelhändler zu schützen, und die Einführung der NDIP Policy Statement auf Retail-Forex-Transaktionen würde Verwirrung und Unklarheit zu schaffen . Es wurden jedoch keine spezifischen Bestimmungen festgestellt, die Verwirrung oder Unklarheiten verursachen. Der Kommentator weiter argumentiert, dass, da die NDIP Policy Statement nicht für CFTC-Registranten gelten, würde seine Anwendung auf Retail-Forex-Transaktionen nicht fördern eine einheitliche regulatorische Behandlung von Retail-Forex-Transaktionen. Der OCC ist der Auffassung, dass es angemessen ist, die NDIP Policy Statement auf Retail-Devisentransaktionen anzuwenden. Der Verbraucherschutz, den die NDIP Policy Statement bietet, ist nicht weniger wichtig für Retail-Devisengeschäfte als für andere Nicht-Deposite-Anlageprodukte. Darüber hinaus gibt es keinen direkten Konflikt zwischen dieser Regel und die NDIP Policy Statement, weil die Erklärung verlangt, dass die nationalen Banken zu entwickeln Politiken und Verfahren, um sicherzustellen, dass Nondeposit Investment Produktverkäufe in Übereinstimmung mit den geltenden Gesetzen und Vorschriften durchgeführt werden. 16 Wenn eine nationale Bank Fragen hat, wie die NDIP Policy Statement für ihre Retail-Forex-Geschäft gilt, sollte sie eine Klärung von ihren Prüfern zu suchen. IV. Abschnitt-für-Abschnitt-Analyse Abschnitt 48.1mdashAuthority, Zweck und Umfang Dieser Abschnitt autorisiert eine nationale Bank, Einzelhandel Forex-Transaktionen durchzuführen. Der OCC forderte eine Stellungnahme dazu auf, ob die Retail-Forex-Regel für nationale Banken gelten sollte, die ausländische Zweigniederlassungen im Einzelhandel mit Devisengeschäften im Ausland tätigen, sei es bei US-amerikanischen oder ausländischen Kunden. Der Kommentator antwortete, dass es keine US-Politik Interesse an der Anwendung U. S. Verbraucherschutz-Regeln für Transaktionen mit Nicht-US-Einwohner von ausländischen Filialen durchgeführt. Diese Transaktionen unterliegen ausländischen regulatorischen Anforderungen, die mit der Retail-Forex-Regel nicht vereinbar sind. Wenn diese Transaktionen auf zwei regulatorische Anforderungen ausgedehnt würden, würden die nationalen Banken auch Wettbewerbsnachteile im Ausland erleiden. Das OCC erkennt die Bedenken des Kommentators an. Einzelne Devisengeschäfte zwischen einer ausländischen Zweigniederlassung einer nationalen Bank und einem Nicht-US-Kunden unterliegen jeglicher anwendbaren Offenlegung, Aufbewahrung, Kapital, Marge, Berichterstattung, Geschäftsführung, Dokumentation und anderen Anforderungen des anwendbaren ausländischen Rechts. Daher unterliegen diese Vorgänge nicht den Anforderungen der sectsectthinsp48.3 und 48.5 bis 48.16. Abschnitt 48.2mdashDefinitionen Dieser Abschnitt definiert Begriffe, die für Einzelhandel Forex-Transaktionen und die regulatorischen Anforderungen, die für Retail-Forex-Transaktionen gelten. Die Definition von ldquoretail forex transactionrdquo umfasst im Allgemeinen die folgenden Transaktionen in Fremdwährung zwischen einer nationalen Bank und einer Person, die kein berechtigter Vertragsteilnehmer ist: thinsp 17 (i) Eine Zukunft oder Option auf eine solche Zukunft 18 (ii) Optionen, die nicht gehandelt werden Eine registrierte nationale Wertpapierbörse 19 und (iii) bestimmte gehebelte, marginierte oder bankfinanzierte Transaktionen, 20 einschließlich Rolling-Spot-Devisentransaktionen. Die Definition entspricht in der Regel der gesetzlichen Sprache in Abschnitt 2 (c) (2) (B) und (C) des CEA. 21 Bestimmte Transaktionen in Fremdwährung sind nicht ldquoretail forex transactions. rdquo Zum Beispiel, ein Spot Forex-Transaktion, in der eine Währung für ein anderes gekauft wird und die beiden Währungen innerhalb von zwei Tagen getauscht werden, würde nicht die Definition von ldquoretail forex transaction. rdquothinsp 22 Ähnlich Enthält ldquoretail forex transactionrdquo keinen Terminkontrakt, der eine vollstreckbare Verpflichtung zur Abnahme oder Übernahme der Lieferung schafft, vorausgesetzt, dass jede Gegenpartei in der Lage ist, Lieferungen im Zusammenhang mit ihrer Geschäftstätigkeit zu liefern und anzunehmen. 23 Darüber hinaus umfasst die Definition keine Transaktionen, die über eine Börse durchgeführt werden, da in diesen Fällen die Gegenpartei sowohl für die nationale Bank als auch für den Einzelhandels-Forex-Kunden anstelle der Nationalbank direkt gegenüber dem Retail-Forex wäre Kunde. In der vorgeschlagenen Richtlinie wurde die Frage beantwortet, ob gehandelte, marginierte oder bankfinanzierte Devisengeschäfte einschließlich Rolling-Devis-Devisentransaktionen (sogenannte Zelener thinsp 24 Kontrakte) als Retail-Devisengeschäfte reguliert werden sollten, die der OCC vorläufig vermutet hat. 25 Der Kommentator unterstützte die Einbeziehung von Rolling-Spot-Devisengeschäften in der Definition von ldquoretail forex transaction. rdquo Eine Rolling Devisen-Transaktion nominal erfordert die Lieferung von Währung innerhalb von zwei Tagen, wie Spot-Transaktionen. In der Praxis werden die Verträge jedoch jeden zweiten Tag unbegrenzt erneuert und keine Währung tatsächlich geliefert, bis eine Partei die Position beendet. 26 Daher sind die Verträge ökonomischer eher Futures als Kassageschäfte, obwohl die Gerichte sie als Kassageschäfte in Form gehalten haben. 27 Wie die CFTCs Einzelhandel Forex-Regel und die FDICs vorgeschlagen Retail Forex Regel, die endgültigen Regeln Definition von ldquoretail forex transactionrdquo umfasst gehebelte, margined oder Bank finanziert Rolling Spot Devisen-Transaktionen, sowie bestimmte andere gehebelte, margined oder bankfinanziert Devisengeschäfte. Der Kommentator bemühte sich um die Klarstellung, dass Devisentermingeschäfte nicht in die Definition aufgenommen würden, da Transaktionen, die tatsächliche Währungen für kommerzielle oder Investmentzwecke umwandeln oder tauschen, ein traditionelles Produkt sind, das von nationalen Banken angeboten wird, und nicht die Verbraucherschutzfragen im Zusammenhang mit Futures oder Rolling Spot-Devisentransaktionen. Die OCC stimmt zu, dass ein Forex-Forward, der nicht genutzt wird, margined oder finanziert durch die Nationalbank nicht die Definition von ldquoretail forex transaction. rdquo Allerdings ist ein gehebelter, margined oder bankfinanziert Forex-Forward ein Einzelhandel Forex-Transaktion, es sei denn, Sie schafft eine durchsetzbare Verpflichtung, zwischen einem Verkäufer und einem Käufer zu liefern, die in der Lage sind, Lieferung bzw. in Verbindung mit ihrer Linie von businessthinsp 28 zu liefern oder zu akzeptieren, oder die OCC bestimmt, dass der Forward nicht funktional oder wirtschaftlich ähnlich zu einer forex Zukunft ist Oder Option, wie unten beschrieben. Die endgültige Regel enthält eine Bestimmung, die es dem OCC erlaubt, bestimmte Transaktionen oder Transaktionstypen vom dritten Glied der ldquoretail-Devisen-Transaktionsdefinition zu befreien. Der OCC ist besorgt darüber, dass bestimmte traditionelle Bankprodukte, die sich von spekulativen Rolling-Spot-Devisengeschäften unterscheiden, unbeabsichtigt in die Definition von ldquoretail forex transactionrdquo als gehebelte, marginierte oder bankfinanzierte Devisentransaktionen fallen können. Dieses Ergebnis wurde nicht durch die Dodd-Frank Act, die Retail-Forex-Regeln erfordert, um ähnliche Transaktionen zu behandeln, die funktional oder wirtschaftlich ähnlich wie Forex-Futures oder Optionen. 29 Nationale Banken können eine Feststellung treffen, dass eine gegebene Transaktion oder Art von Transaktion nicht unter die dritte Grenze der ldquoretail forex transactionrdquo Definition fällt, indem sie eine schriftliche Anfrage an den OCC einreicht. Der Kommentator bat um Bestätigung, dass Pfandkonten mit Devisenmerkmalen außerhalb des Geltungsbereichs der Regel sind. Die Rechtssicherheit für Bankproduktegesetz von 2000 in der Fassung des Dodd-Frank-Gesetzes setzt generell ldquo-identifizierte Bankprodukte aus dem CEA aus. 30 Identifizierte Bankprodukte umfassen: Depotkonten, Sparkonten, Einlagenzertifikate oder andere Einlagenzertifikate, die von Banken akzeptiert werden, die von Kreditinstituten oder von einem Kreditinstitut oder einem ähnlichen Kreditinstitut erhoben werden Bestimmte Darlehensbeteiligungen. 31 Da identifizierte Bankprodukte nicht dem CEA unterliegen, sind sie nach Abschnitt 2 (c) (2) (E) (ii) des CEA nicht verboten. Um Klarheit zu schaffen, schließt die abschließende Regel keine identifizierten Bankprodukte aus der Definition von ldquoretail forex transaction. rdquo aus. Identifizierte Bankprodukte, die eingebettete Devisenmerkmale aufweisen, beispielsweise ein Depot, in dem der Kunde Geld in einer Währung einzahlen und Geld in einem anderen Geld abheben kann , Sind nicht Einzelhandel Forex-Transaktionen. Dieser Abschnitt definiert mehrere Begriffe unter Bezugnahme auf den CEA, der wichtigste davon ist ldquoullible Vertragsteilnehmer. rdquo Fremdwährungstransaktionen mit förderfähigen Vertragsteilnehmern gelten nicht als Einzelhandels-Devisengeschäfte und unterliegen daher nicht dieser Regel. Zusätzlich zu einer Vielzahl von Finanzinstituten können bestimmte Regierungsstellen, Unternehmen und Einzelpersonen berechtigte Vertragsteilnehmer sein. 32 Abschnitt 48.3mdashGeschränkte Transaktionen Dieser Abschnitt untersagt, dass eine nationale Bank und ihre mit der Institution verbundenen Parteien betrügerische Handlungen im Zusammenhang mit Retail-Devisentransaktionen durchführen. Dieser Abschnitt verbietet auch eine nationale Bank zu handeln als Gegenpartei eines Retail-Devisen-Transaktion, wenn die nationale Bank oder ihre Tochtergesellschaft Ausübung über die Kunden Retail Forex-Konto ausübt, weil die OCC sieht solche Selbst-Handling als unangemessen. Das OCC hat keine Kommentare zu diesem Abschnitt erhalten und es wie vorgeschlagen angenommen. Start Gedruckt Seite 41378 Abschnitt 48.4mdashAufsichtsrecht Non-Objektion Dieser Abschnitt erfordert, dass eine nationale Bank eine schriftliche Aufsichtsbehörde ohne Einwände vor einem Engagement in einem Retail-Forex-Geschäft zu erhalten. Um eine solche Einrede zu erlangen, muss die nationale Bank solche Informationen zur Verfügung stellen, die der OCC für notwendig erachtet, um festzustellen, ob die nationale Bank die Anforderungen der Regel erfüllt. Diese Informationen enthalten Informationen über: Kunden Due Diligence (einschließlich Kreditauswertungen, Angemessenheit des Kunden und ldquoknow Ihre customerrdquo Dokumentation) neue Produkt Genehmigungen Haarschnitte für noncash Marge und Interessenkonflikte. Darüber hinaus muss die Nationalbank nachweisen, dass sie über angemessene schriftliche Grundsätze, Verfahren und Risikomess - und - managementsysteme und - kontrollen verfügt. Nationalbanken, die im Einzelhandel Forex-Transaktionen ab dem Zeitpunkt des Inkrafttretens dieser Regel, die umgehend beantragen die OCCs Überprüfung ihrer Retail-Forex-Geschäft wird sechs Monate oder einen längeren Zeitraum von der OCC zur Verfügung gestellt, um ihre Operationen in Übereinstimmung mit der Regel. Unter dieser Regel, eine nationale Bank, die die OCCs Überprüfung innerhalb von 30 Tagen nach dem Wirksamwerden der endgültigen Einzelhandel Forex-Regel anfordert und legt diese Informationen wie die OCC kann innerhalb der Frist beantragt, die OCC bietet wird als Betrieb seiner Retail-Forex-Geschäft Gemäß einer Vorschrift oder Regulierung einer Bundesaufsichtsbehörde, wie dies im Rahmen des CEA vorgeschrieben ist, für diesen Zeitraum. 33 Eine nationale Bank muss nicht eine Futures-Selbstregulierung Organisation als Voraussetzung für die Durchführung eines Retail-Forex-Geschäft. Der Kommentator unterstützte die Annahme dieses Abschnitts, und das OCC nimmt es wie vorgeschlagen an. Abschnitt 48.5mdashAnwendung und Schließung von Offsetting Long und Short-Positionen Dieser Abschnitt erfordert eine nationale Bank zu schließen Ausgleich von Long-und Short-Positionen in einem Einzelhandel Forex-Konto. Die nationale Bank müsste solche Positionen ausgleichen, unabhängig davon, ob der Kunde anders beauftragt hat. Der CFTC kam zu dem Schluss, dass die Aufrechterhaltung offener Long - und Short-Positionen in einem Einzelhandels-Forex-Kundenkonto die Möglichkeit für den Kunden, auf die Transaktionen zu profitieren, erhöht die Gebühren des Kunden bezahlt, und lädt Missbrauch. 34 Das OCC stimmte dieser Sorge in der Bekanntmachung der vorgeschlagenen Regelung zu. Der Kommentator stellte fest, dass ein Kunde Anweisungen für die Art und Weise, in der die Kunden Einzelhandel Forex-Transaktion ausgeglichen werden, wenn: (i) Der Kunde pflegt separate Konten von verschiedenen Beratern verwaltet (ii) der Kunde unterhält getrennte Konten mit verschiedenen (Iii) der Kunde verschiedene Handelsstrategien in einem Konto anwendet und bestimmte Aufträge anwendet, um dieses Risiko zu riskieren. Der Kommentator suchte auch die Klarstellung, dass ein Kunde spezifische Offset-Anweisungen schriftlich oder mündlich vorlegen könne und dass diese Anweisungen auf einer Deckenbasis erfolgen können. Das OCC stimmt zu, dass ein Kunde in der Lage sein sollte, Einzelhandels-Devisentransaktionen in einer bestimmten Weise auszugleichen, falls er dies wünscht. Absatz (c) wurde geändert, um zu gewährleisten, dass die nationale Bank ungeachtet der in den Absätzen (a) und (b) genannten Verzugsregelungen die Einzelhandelsgeschäfte nach kundenspezifischen Weisungen kompensieren muss. Deckenanweisungen reichen hierfür nicht aus, da sie die Defaultregel ausschließen könnten. Jedoch müssen Versatzanweisungen nicht separat für jedes Paar von Aufträgen gegeben werden, um ldquospecific. rdquo zu sein. Anweisungen, die auf ausreichend definierte Sätze von Transaktionen zutreffen, könnten spezifisch genug sein. Schließlich können Retail-Devisenkunden im Einklang mit den Änderungen zu Sectthinsp48.12 eine schriftliche oder mündliche Abrechnung durchführen. Die Nationalbank muss eine Aufzeichnung jeder Versatzanweisung erstellen und pflegen. 35 Abschnitt 48.6mdashDisclosure Dieser Abschnitt erfordert, dass eine nationale Bank Retail-Forex-Kunden eine Risikoverteilungserklärung zur Verfügung stellt, die derjenigen ähnelt, die die CFTC-Einzelhandelsforex-Regel erfordert, die jedoch auf bestimmte einzigartige Merkmale von Einzelhandelsforex in nationalen Banken abgestimmt ist. Das vorgeschriebene Risiko Offenlegungserklärung würde die Risiken im Zusammenhang mit Retail-Forex-Transaktionen beschreiben. Der Kommentator stimmte mit der Notwendigkeit einer robusten Offenlegung von Risiken überein, schlug jedoch vor, dass eine kürzere, klarere, direktere und weniger redundante Aussage effektiver wäre. Die letzte Regel enthält mehrere Änderungen an den Offenlegungen, um Redundanzen zu beseitigen, Unklarheiten zu behandeln und die Informationen klarer zu vermitteln. Der Vorschlag beantragte eine Stellungnahme, ob die Offenlegungserklärung den Prozentsatz der gewinnbringenden Retail-Devisenkonten offenlegen sollte. Der Kommentator sagte, dass die Offenlegung des Verhältnisses von profitable zu nonprofitable Retail Forex-Konten ist nicht sinnvoll, da diese Verhältnisse von vielen Faktoren abhängen (einschließlich der Handelskompetenz der Kunden) und könnte darauf hindeuten, eine nationale Bank ist ein attraktiver Einzelhandel Forex-Kontrahent als andere. In seiner Forex-Handelsregel verlangt die CFTC von ihren Registranten, den Einzelkunden den Prozentsatz der Einzelhandels-Devisenkonten, die einen Gewinn erwirtschafteten, und dem Prozentsatz dieser Konten, die in den letzten vier Quartalen einen Verlust erlitten haben, offen zu legen. 36 Die CFTC erklärte, dass die überwiegende Mehrheit der Einzelhändler, die diese Transaktionen eingehen, nur für spekulative Zwecke tätig sei und dass nur wenige dieser Teilnehmer gewinnbringend handeln. 37 In ihrer Schlussregel hat die CFTC diese Anforderung als geeignet erachtet, die Privatkunden vor inhärenten Konflikten zu schützen, die in den Geschäften des Einzelhandels im Freiverkehr gehandelt werden. 38 Das OCC stimmt mit dem CFTC überein, und die endgültige Regel erfordert diese Offenlegung. Der Vorschlag beantragte eine Stellungnahme, ob die Offenlegungserklärung eine Offenlegung enthalten sollte, dass der Händler, wenn er einen Geldhandel verliert, Geld verdient. Der Kommentator sagte, dass diese Offenlegung ist ungenau, weil die Bank sofort heimt Einzelhandel Forex-Transaktionen oder Netze mit ähnlichen Transaktionen und daher nicht profitieren von Wechselkursschwankungen. Der Kommentator argumentierte, es sei genauer, die Kunden darüber zu informieren, dass die Bank Transaktionen tätigen oder steigern oder Transaktionsgebühren anwenden kann, um Einnahmen für die Bank zu erzielen. Das OCC versteht, dass das ökonomische Modell eines Einzelhandelsforexgeschäfts sein kann, von Spreads, von Gebühren und von Provisionen zu profitieren. Nichtsdestotrotz, weil eine nationale Bank im Einzelhandel Forex-Transaktionen Handel als Hauptinhaber, per Definition, wenn der Einzelhandel Forex-Kunde Geld für eine Retail-Forex-Transaktion verliert, die nationale Bank macht Geld für diese Transaktion. Das OCC glaubt daher, dass diese Offenlegung korrekt ist und hilft potenzielle Retail-Forex-Kunden das Verständnis der Art der Einzelhandel Forex-Transaktionen. Ebenso erfordert die CFTCs Retail Forex-Regel eine Offenlegung, dass, wenn ein Einzelhandelskunden Geld verliert, Geld für solche Geschäfte, zusätzlich zu Gebühren, Provisionen oder Spreads Geld. 39 Die endgültige Regelung enthält diese Angabepflicht. Der Vorschlag fragte, ob es bequem wäre, die nationalen Banken und Retail-Forex-Kunden, damit die Retail-Forex-Risiko-Offenlegung mit anderen Angaben, die die nationalen Banken an ihre Kunden zu kombinieren. Der Kommentator bat die OCC zu bestätigen, dass die nationalen Banken können Themen hinzufügen, um das Risiko Offenlegungserklärung. Der OCC ist besorgt, dass die Wirksamkeit der Offenlegung vermindert werden könnte, wenn sie von anderen Themen umgeben wäre. Daher ist die endgültige Regel erfordert die Risiko Offenlegungserklärung auf potenzielle Retail-Forex-Kunden gegeben werden, wie in der Regel festgelegt. Nationale Banken können in einem separaten Dokument beschreiben und zusätzliche Informationen über Retail-Devisengeschäfte bereitstellen. Der Kommentator forderte den OCC ferner auf, zu bestätigen, dass die Offenlegungserklärung an Kontoeröffnungskontrakte oder Formulare angehängt werden kann und dass eine einzige Signatur des Kunden auf einem kombinierten Kontovertrag und Offenlegungsformular verwendet werden kann, solange der Kunde an und weitergeleitet wird Erkennt die Offenlegungserklärung unmittelbar vor der Signaturzeile an. Der OCC ist der Auffassung, dass ein separates Risiko-Offenlegungsdokument die Risiken im Retail-Devisengeschäft zutreffend hervorhebt und dass eine separate Signatur für die separate Risikoverteilung angemessen eine potenzielle Retail-Forex-Kunden auf die Risikoverteilung aufmerksam macht. Eine nationale Bank kann jedoch die Risikoverteilung an ein verwandtes Dokument, wie beispielsweise den Kontoabschluss, anhängen. Der Vorschlag beantragte eine Stellungnahme, ob die Offenlegungserklärung eine Offenlegung der Gebühren umfassen sollte, die die nationale Bank den Retail-Devisenkunden belastet. Der Kommentator stimmte darin überein, dass die Offenlegung von Gebühren angemessen ist, sollte aber keine Erträge aus der Absicherung von Retail-Forex-Kundenpositionen oder Ertragsströmen beinhalten, die dem Kunden nicht belastet werden. Darüber hinaus stellte der Kommentator fest, dass es unpraktisch ist, die Angebots / Nachfrage-Spreizung numerisch anzugeben, da sie variieren kann. Die endgültige Regel, wie die vorgeschlagene Regel, erfordert nicht die nationalen Banken zu offenbaren Einkommensströme nicht auf den Einzelhandel Forex-Kunden belastet. Allerdings muss eine nationale Bank mehr tun, als nur die Mittel zu beschreiben, durch die sie Einnahmen erzielt. Soweit praktisch, muss es die Gebühren, Gebühren, Spreads oder Provisionen, die die nationale Bank kann auf dem Einzelhandel forex Kunden in Verbindung mit dem Kunden Einzelhandel Forex-Konto oder ein Retail-Forex-Transaktion zu quantifizieren. 40 Die OCC vertritt ferner die Auffassung, dass die Offenlegung der Geld - / Briefspanne auf vielfältige Weise möglich ist. Wenn eine nationale Bank ihre Preise von den von einem Dritten gebotenen Preisen absetzt, kann die nationale Bank die Verwendung der dritten Preisfestsetzung und die Aufzählung der Einzelkunden-Devisenkunden offen legen. Alternativ kann die nationale Bank die Bid / Ask-Spread offenlegen, indem sie sowohl die Bid-und Ask-Preise an Retail-Forex-Kunden vor dem Eintritt in ein Retail-Forex-Transaktion. Diese Anführungszeichen können als Teil einer elektronischen Handelsplattform bereitgestellt werden oder, nachdem ein Einzelhandels-Forex-Kunde die nationale Bank für eine Einzelhandels-Devisentransaktion anruft, indem sie sowohl einen Bid - als auch einen Ask-Preis für die Transaktion bereitstellt. The commenter read the disclosure to suggest that the national bank cannot seek to recover losses not covered by a customers margin account via an appropriate dispute resolution forum and asked the OCC to confirm that this was not the case. Section 48.9(d)(4) requires a national bank, in the event that a retail forex customers margin falls below the amount needed to satisfy the margin requirement to either: (1) Collect sufficient margin from the retail forex customer or (2) liquidate the retail forex customers retail forex transactions. The final rule does not forbid a national bank from seeking to recover a deficiency from a retail forex customer in an appropriate venue. The disclosure has been revised to make this fact clear. Finally, the commenter said that the disclosure regarding the availability of FDIC-insurance for retail forex transactions should be clarified. The disclosure requires a national bank to state that retail forex transactions are not FDIC-insured. The commenter agreed with that statement. It noted, however, that margin funds may be insured deposits. The FDIC-insured status of funds held in a retail forex margin account will depend on whether such funds are held in a manner that meets the requirements of the Federal Deposit Insurance Act and its implementing regulations. National banks may accurately disclose the availability of FDIC insurance for retail forex margin accounts in a separate document as permitted by law. Section 48.7mdashRecordkeeping This section specifies which documents and records that a national bank engaged in retail forex transactions must retain for examination by the OCC. This section also prescribes document maintenance standards. The OCC notes that records may be kept electronically as permitted under the Electronic Signatures in Global and National Commerce Act. 41 The OCC received no comments on this section. Recordkeeping requirements found in sectthinsp48.13(a)(3) of the proposed rule were moved into this section to centralize recordkeeping requirements in one section. Furthermore, the recordkeeping requirements have been modified to accommodate oral orders and offset instructions. A national bank must create an audio recording of oral orders and offset instructions. Section 48.8mdashCapital Requirements This section requires that a national bank that offers or enters into retail forex transactions must be ldquowell capitalizedrdquo as defined in the OCCs prompt corrective action regulation. 42 In addition, a national bank must continue to hold capital against retail forex transactions as provided in the OCCs capital regulation. 43 This rule does not amend the OCCs prompt corrective action regulation or capital regulation. The proposed rule contained a provision allowing the OCC to exempt a national bank from the well-capitalized requirement. This provision has been removed in light of the general reservation of authority in sectthinsp48.17. Section 48.9mdashMargin Requirements Paragraph (a) requires a national bank that engages in retail forex transactions, in advance of any such transaction, to collect from the retail forex customer margin equal to at least 2 percent of the notional value of the retail forex transaction if the transaction is in a major currency pair and at least 5 percent of the notional value of the retail forex transaction otherwise. These margin requirements are identical to the requirements imposed by the CFTCs retail forex rule. The proposal requested comments on whether it should define the major currencies in the final rule but did not receive any. The final rule adopts the proposals approach to identifying the major currencies. A major currency pair is a currency pair with two major currencies. The Start Printed Page 41380 major currencies currently are the U. S. Dollar (USD), Canadian Dollar (CAD), Euro (EUR), United Kingdom Pound (GBP), Japanese Yen (JPY), Swiss Franc (CHF), New Zealand Dollar (NZD), Australian Dollar (AUD), Swedish Kronor (SEK), Danish Kroner (DKK), and Norwegian Krone (NOK). 44 An evolving market could change the major currencies, so the OCC is not proposing to define the term ldquomajor currency, rdquo but rather expects that national banks will obtain an interpretive letter from the OCC prior to treating any currency other than those listed above as a ldquomajor currency. rdquothinsp 45 For retail forex transactions, margin protects the retail forex customer from the risks related to trading with excessive leverage. The volatility of the foreign currency markets exposes retail forex customers to substantial risk of loss. High leverage ratios can significantly increase a customers losses and gains. Even a small move against a customers position can result in a substantial loss. Even with required margin, losses can exceed the margin posted and, if the account is not closed out, and, depending on the specific circumstances, the customer could be liable for additional losses. Given the risks that are inherent in the trading of retail forex transactions by retail customers, the only funds that should be invested in such transactions are those that the customer can afford to lose. Prior to the CFTCs rule, nonbank dealers routinely permitted customers to trade with 1 percent margin (leverage of 100:1) and sometimes with as little as 0.25 percent margin (leverage of 400:1). When the CFTC proposed its retail forex rule in January 2010, it proposed a margin requirement of 10 percent (leverage of 10:1). In response to comments, the CFTC reduced the required margin in the final rule to 2 percent (leverage of 50:1) for trades involving major currencies and 5 percent (leverage of 20:1) for trades involving non-major currencies. The proposal requested comment on whether these margin requirements were appropriate to protect retail forex customers. The commenter did not object to the amount of margin required. However, the commenter suggested that the margin required by this paragraph should be initial margin rather than maintenance margin. The commenter also suggested that national banks be allowed to set maintenance margin levels as a matter of the banks credit and risk policies in a manner that balances (i) protecting customers from a forced close-put of their positions as soon as an adverse market move erodes margin under the 2 or 5 percent minimum level with (ii) the need to promptly collect margin and close out positions when a customer fails to meet a margin call. The commenter also suggested that customers should have some reasonable time to meet margin calls before they are deemed to have defaulted and face a forced liquidation of their positions. Subject to reasonable collection times as described below, a national bank must ensure that there is always sufficient margin in a retail forex customers margin account for the customers open retail forex transactions. If the amount of margin in a retail forex customers margin account is insufficient to meet the requirements of paragraph (a), then sectthinsp48.9(d)(4) requires the national bank to make a margin call to replenish the margin account to an acceptable level and, if the customer does not comply with the margin call, to liquidate the retail forex customers retail forex transactions. Retail forex customers should have a reasonable amount of time to post required margin for retail forex transactions. Market practice is for retail forex counterparties to make margin calls at the close of trading on a trading day based on margin levels at the end of that day or at the open of trading on the next trading day based on margin levels at the end of that prior day. If the retail forex customer does not post sufficient margin by the end of the next close of trading, then the retail forex counterparty liquidates the customers retail forex account. In other words, by the close of business on a given trading day, the margin account must be sufficient to meet the margin requirements as at the end of the prior trading day. Paragraph (b) specifies the acceptable forms of margin that customers may post. National banks must establish policies and procedures providing for haircuts for noncash margin collected from customers and must review these haircuts annually. It may be prudent for national banks to review and modify the size of the haircuts more frequently. The OCC requested comment on whether the final rule should specify haircuts for noncash margin. The OCC received no comments on this paragraph and adopts this paragraph as proposed. Paragraph (c) requires a national bank to hold each retail forex customers retail forex transaction margin in a separate account. This paragraph is designed to work with the prohibition on set-off in paragraph (e), so that a national bank may not have an account agreement that treats all of a retail forex customers assets held by a bank as margin for retail forex transactions. The commenter requested clarification that this paragraph allows national banks to place margin into an omnibus or commingled account for operational convenience, provided that the bank keeps records of each customers margin balance. A national bank may place margin collected from retail forex customers into an omnibus or commingled account if the bank keeps records of each retail forex customers margin balance. A ldquoseparate accountrdquo is one separate from the retail forex customers other accounts at the bank. For example, margin for retail forex transactions cannot be held in a retail forex customers savings account. Funds in a savings account pledged as retail forex margin must be transferred to a separate margin account, which could be an individual or an omnibus margin account. The final rule contains slightly modified language to clarify this intent. The FDIC-insured status of funds held in an omnibus account will depend on whether such funds are held in a manner that meets the requirements of the Federal Deposit Insurance Act and its implementing regulations. Paragraph (d) requires a national bank to collect additional margin from the customer or to liquidate the customers position if the amount of margin held by the national bank fails to meet the requirements of paragraph (a). The proposed rule would have required the national bank to mark the customers open retail forex positions and the value of the customers margin to the market daily to ensure that a retail forex customer does not accumulate substantial losses not covered by margin. The proposal requested comment on how frequently retail forex customers margin accounts should be marked to market. The commenter asked that the final rules permit marking to market more frequently than daily if the national banks systems and customer agreements permit. The final rule, like the proposed rule, requires marking to market at least once per day. Nothing in paragraph (d) forbids a more frequent schedule. Start Printed Page 41381 Paragraph (e) prohibits a national bank from applying a retail forex customers retail forex obligations against any asset or liability of the retail forex customer other than money or property pledged as margin. 46 A national banks relationship with a retail forex customer may evolve out of a prior relationship of providing financial services or may evolve into such a relationship. Thus, it is more likely that a national bank acting as a retail forex counterparty will hold other assets or liabilities of a retail forex customer, for example a deposit account or mortgage, than a retail forex dealer regulated by the CFTC. The OCC believes that it is inappropriate to allow a national bank to leave trades open and allow additional obligations to accrue that can be applied against a retail forex customers other assets or liabilities held by the national bank. However, should a retail forex customers retail forex obligations exceed the amount of margin he or she has pledged, this rule does not forbid a national bank from seeking to recover the deficiency in an appropriate forum, such as a court of law. Paragraph (e) does not apply to debts a retail forex customer owes to a national bank as recognized in a judgment of a court of competent jurisdiction. The commenter suggested that retail forex customers should be able to pledge assets other than those held in the customers margin account. For example, a customer could nominate a deposit account as containing margin for its retail forex transactions. Nothing in this rule prevents retail forex customers from pledging other assets they have at the bank as margin for retail forex transactions. However, once those assets are pledged as margin, the national bank must transfer them to the separate margin account. For example, if a retail forex customer pledges 500 in her checking account as margin, then the bank must deduct 500 from the checking account and place 500 in the margin account. The OCC believes this transfer appropriately alerts retail forex customers to the nature of the pledge. A national bank may not evade this requirement by merely taking a security interest in assets pledged as margin: pledged assets must be placed in a separate margin account. Section 48.10mdashRequired Reporting to Customers This section requires a national bank engaging in retail forex transactions to provide each retail forex customer a monthly statement and confirmation statements. The proposal sought comment on whether this section provides for statements that would be useful and meaningful to retail forex customers or whether other information would be more appropriate. The commenter sought clarification that the statements may be provided electronically, and also suggested that retail forex customers would be better served with continuous online access to account information rather than monthly statements. The OCC encourages national banks to provide real-time, continuous access to account information. This rule does not prevent national banks from doing so. However, the OCC believes it is valuable to require national banks to provide retail forex account information to retail forex customers at least once per month. Monthly statements may be provided electronically as permitted under the Electronic Signatures in Global and National Commerce Act. 47 Section 48.11mdashUnlawful Representations This section prohibits a national bank and its institution-affiliated parties from representing that the Federal government, the OCC, or any other Federal agency has sponsored, recommended, or approved retail forex transactions or products in any way. This section also prohibits a national bank from implying or representing that it will guarantee against or limit retail forex customer losses or not collect margin as required by sectthinsp48.9. This section does not prohibit a national bank from sharing in a loss resulting from error or mishandling of an order. Guaranties entered into prior to effectiveness of the prohibition would only be affected if an attempt is made to extend, modify, or renew them. This section also does not prohibit a national bank from hedging or otherwise mitigating its own exposure to retail forex transactions or any other foreign exchange risk. The OCC received no comments to this section and adopts it as proposed. Section 48.12mdashAuthorization to Trade The proposed rule required national banks to have specific written authorization from a retail forex customer before effecting a retail forex transaction. The commenter said that requiring specific written authorization from a retail forex customer before effecting a retail forex transaction for that customer would be burdensome and detrimental to the customers interests, if, for example, the customer cannot convey written instructions because of technical difficulties. The OCC agrees with this concern and further notes that the CFTCs retail forex rule does not require written authorization for each retail forex transaction. The final rule requires a national bank to obtain a retail forex customers specific authorization (written or oral) to effect a particular trade. National banks must keep records of authorizations to trade pursuant to this rule. Section 48.13mdashTrading and Operational Standards This section largely follows the trading standards of the CFTCs retail forex rule, which were developed to prevent some of the deceptive or unfair practices identified by the CFTC and the National Futures Association. Under paragraph (a), a national bank engaging in retail forex transactions is required to establish and enforce internal rules, procedures, and controls (1) to prevent front running, a practice in which transactions in accounts of the national bank or its related persons are executed before a similar customer order and (2) to establish settlement prices fairly and objectively. The commenter requested clarification that the prohibition on front running applies only when the person entering orders for the banks account or the account of related persons has knowledge of unexecuted retail customer orders, and that a national bank may comply with this provision by erecting a firewall between the retail forex order book and other forex trading desks. The final rule requires national banks to establish reasonable policies, procedures, and controls to address front running. This provision is designed to prevent the national banks from unfairly taking advantage of information they gain from customer trades. Effective firewalls and information barriers are reasonable policies, procedures, and controls to ensure that a national bank does not take unfair advantage of its retail forex customers. The final rule clarifies paragraph (a) accordingly. Paragraph (b) prohibits a national bank engaging in retail forex transactions from disclosing that it Start Printed Page 41382 holds another persons order unless disclosure is necessary for execution or is made at the OCCs request. The OCC received no comments on this paragraph and adopts this paragraph as proposed. Paragraph (c) ensures that related persons of another retail forex counterparty do not open accounts with a national bank without the knowledge and authorization of the account surveillance personnel of the other retail forex counterparty with which they are affiliated. Similarly, paragraph (d) ensures that related persons of a national bank do not open accounts with other retail forex counterparties without the knowledge and authorization of the account surveillance personnel of the national bank with which they are affiliated. The commenter requested confirmation that national banks may rely on a representation of potential customers that they are not affiliated with a retail forex counterparty. Paragraph (c) prohibits a national bank from knowingly handling the retail forex account of a related person of a retail forex counterparty. To the extent reasonable, national banks may rely on representations of potential retail forex customers. If, however, a national bank has actual knowledge that a retail forex customer is a related person of a retail forex counterparty, then no representation by the customer will allow the bank to handle that retail forex account. A national bank should inquire as to whether a potential retail forex customer is related to a retail forex counterparty to avoid violating paragraph (c) through willful ignorance. The commenter also requested clarification that these paragraphs apply only to employees of firms that offer retail forex transactions, and, in the case of banks, only employees of the retail forex business and not any employee of the bank that offers retail forex transactions. The OCC agrees that the prohibitions in paragraph (c) and (d) should only apply to employees working in the retail forex business paragraphs (c) and (d) are designed to prevent evasion of the prohibition against front running. The final rule clarifies this point. Paragraph (e) prohibits a national bank engaging in retail forex transactions from (1) entering a retail forex transaction to be executed at a price that is not at or near prices at which other retail forex customers have executed materially similar transactions with the national bank during the same time period, (2) changing prices after confirmation, (3) providing a retail forex customer with a new bid price that is higher (or lower) than previously provided without providing a new ask price that is similarly higher (or lower) as well, and (4) establishing a new position for a retail forex customer (except to offset an existing position) if the national bank holds one or more outstanding orders of other retail forex customers for the same currency pair at a comparable price. Paragraph (e)(3) does not prevent a national bank from changing the bid or ask prices of a retail forex transaction to respond to market events. The OCC understands that market practice among CFTC-registrants is not to offer requotes but to simply reject orders and advise customers they may submit a new order (which the dealer may or may not accept). Similarly, a national bank may reject an order and advise customers that they may submit a new order. The proposal sought comment on whether paragraph (e)(3) appropriately protected retail forex customers or whether a prohibition on re-quoting would be simpler. The commenter argued that the prohibition on re-quoting in paragraph (e)(3) is overly broad and should permit new bids or offers to reflect updated spreads. In the alternative, the commenter suggested prohibiting re-quoting and requiring that, in the event an order is not confirmed, the customer must submit a new order at the then-currently displayed price. As stated above, rather than allowing requotes, a national bank may reject orders and request that customers submit a new order. Paragraph (e)(3) is consistent with the CFTCs retail forex rule and the OCC adopts it as proposed. Paragraph (e)(4) requires a national bank engaging in retail forex transactions to execute similar orders in the order they are received. The prohibition prevents a national bank from offering preferred execution to some of its retail forex customers but not others. Section 48.14mdashSupervision This section imposes on a national bank and its agents, officers, and employees a duty to supervise subordinates with responsibility for retail forex transactions to ensure compliance with the OCCs retail forex rule. The proposal requested comment on whether this section imposed requirements not already encompassed by safety and soundness standards. Having received no comments to this section, the OCC adopts it as proposed. Section 48.15mdashNotice of Transfers This section describes the requirements for transferring a retail forex account. Generally, a national bank must provide retail forex customers 30 days prior notice before transferring or assigning their account. Affected customers may then instruct the national bank to transfer the account to an institution of their choosing or liquidate the account. There are three exceptions to the above notice requirement: a transfer in connection with the receivership or conservatorship under the Federal Deposit Insurance Act a transfer pursuant to a retail forex customers specific request and a transfer otherwise allowed by applicable law. A national bank that is the transferee of retail forex accounts must generally provide the transferred customers with the risk disclosure statement of sectthinsp48.6 and obtain each affected customers written acknowledgement within 60 days. The OCC received no comments to this section and adopts it as proposed. Section 48.16mdashCustomer Dispute Resolution This section imposes limitations on how a national bank may handle disputes arising out of a retail forex transaction. For example, this section would restrict a national banks ability to require mandatory arbitration for such disputes. The OCC received no comments to this section and adopts is as proposed. Section 48.17mdashReservation of Authority This section allows the OCC to modify certain requirements of this rule consistent with safety and soundness and the protection of retail forex customers. The OCC understands the need for flexibility as foreign exchange products or foreign exchange trading procedures develop and to ensure that such products or trading procedures are subject to appropriate customer protection and safety and soundness standards. V. Regulatory Analysis A. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA), 5 U. S.C. 601 et seq., generally requires an agency that is issuing a proposed rule to prepare and make available for public comment an initial regulatory flexibility analysis that describes the impact of the proposed rule on small entities. The RFA provides that an agency is not required to prepare and publish an initial regulatory flexibility analysis if the agency certifies that the proposed rule will not, if promulgated as a final rule, have a significant economic impact on a substantial number of small entities. Under regulations issued by the Start Printed Page 41383 Small Business Administration, a small entity includes a commercial bank with assets of 175 million or less. 48 This rule as proposed would impose recordkeeping and disclosure requirements on banks, including small banks, which engage in retail forex transactions with their customers. Pursuant to section 605(b) of the RFA, the OCC certified that this rule, as proposed, would not have a significant economic impact on a substantial number of the small entities it supervises. Accordingly, a regulatory flexibility analysis was not required. In making this determination, the OCC estimated that there were no small banking organizations currently engaging in retail forex transactions with their customers. Therefore, the OCC estimates that no small banking organizations under its supervision would be affected by this final rule. B. Paperwork Reduction Act In conjunction with the Notice of Proposed Rulemaking (NPRM), 49 the OCC submitted the information collection requirements contained therein to OMB for review under the Paperwork Reduction Act (PRA). In response, the Office of Management and Budget (OMB) filed comments with the OCC in accordance with 5 CFR 1320.11 (c). The comments indicated that OMB was withholding approval at that time. The Agencies were directed to examine public comment in response to the NPRM and include in the supporting statement of the information collection request (ICR) to be filed at the final rule stage a description of how the agency has responded to any public comments on the ICR, including comments maximizing the practical utility of the collection and minimizing the burden. The OCC received one comment addressing the substance and/or method of the disclosure and reporting requirements contained in the proposed rule. This comment and the OCCs response to the comment is included in the preamble discussion and in a revised Supporting Statement submitted to OMB. The information collection requirements contained in this final rule have been submitted by the OCC to OMB for review and approval under 44 U. S.C. 3506 and 5 CFR part 1320. In accordance with section 3512 of the PRA, 44 U. S.C. 3512. the OCC may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid OMB control number. The information collection requirements are found in sectsectthinsp48.4-48.7, 48.9-48.10, 48.13, and 48.15-48.16. Comments continue to be invited on: (a) Whether the collection of information is necessary for the proper performance of the OCCs functions, including whether the information has practical utility (b) The accuracy of the estimate of the burden of the information collection, including the validity of the methodology and assumptions used (c) Ways to enhance the quality, utility, and clarity of the information to be collected (d) Ways to minimize the burden of information collection on respondents, including through the use of automated collection techniques or other forms of information technology and (e) Estimates of capital or startup costs and costs of operation, maintenance, and purchase of services to provide information. All comments will become a matter of public record. Comments should be addressed to: Communications Division, Office of the Comptroller of the Currency, Public Information Room, Mailstop 2-3, Attention: 1557-0250, 250 E Street, SW. Washington, DC 20219. In addition, comments may be sent by fax to 202-874-5274, or by electronic mail to regsmentsocc. treas. gov . You may personally inspect and photocopy comments at the OCC, 250 E Street, SW. Washington, DC 20219. For security reasons, the OCC requires that visitors make an appointment to inspect comments. You may do so by calling 202-874-4700. Upon arrival, visitors will be required to present valid government-issued photo identification and submit to security screening in order to inspect and photocopy comments. Additionally, you should send a copy of your comments to the OMB Desk Officer, by mail to U. S. Office of Management and Budget, 725 17th Street, NW. 10235, Washington, DC 20503, or by fax to 202-395-6974. Proposed Information Collection Title of Information Collection: Retail Foreign Exchange Transactions. Frequency of Response: On occasion. Affected Public: Businesses or other for-profit. Respondents: National banks and Federal branches and agencies of foreign banks. Reporting Requirements The reporting requirements in sectthinsp48.4 require that, prior to initiating a retail forex business, a national bank provide the OCC with prior notice and obtain a written supervisory non-objection letter. In order to obtain a supervisory non-objection letter, a national bank must have written policies and procedures and risk measurement and management systems and controls in place to ensure that retail forex transactions are conducted in a safe and sound manner. The national bank must also provide other information required by the OCC, such as documentation of customer due diligence, new product approvals, and haircuts applied to noncash margins. A national bank already engaging in a retail forex business may continue to do so, provided it requests an extension of time. Disclosure Requirements Section 48.5, regarding the application and closing out of offsetting long and short positions, requires a national bank to promptly provide the customer with a statement reflecting the financial result of the transactions and the name of the introducing broker to the account. The customer provides specific written instructions on how the offsetting transaction should be applied. Section 48.6 requires that a national bank furnish a retail forex customer with a written disclosure before opening an account that will engage in retail forex transactions for a retail forex customer and receive an acknowledgment from the customer that it was received and understood. It also requires the disclosure by a national bank of its fees and other charges and its profitable accounts ratio. Section 48.10 requires a national bank to issue monthly statements to each retail forex customer and to send confirmation statements following transactions. Section 48.13(b) allows disclosure by a national bank that an order of another person is being held by them only when necessary to the effective execution of the order or when the disclosure is requested by the OCC. Section 48.13(c) prohibits a national bank engaging in retail forex transactions from knowingly handling the account of any related person of another retail forex counterparty unless it receives proper written authorization, promptly prepares a written record of the order, and transmits to the counterparty copies all statements and written records. Section 48.13(d) prohibits a related person of a national bank engaging in forex transactions from having an account with another retail forex counterparty unless the counterparty receives proper written authorization and transmits copies of all statements Start Printed Page 41384 and written records for the related persons retail forex accounts to the national bank. Section 48.15 requires a national bank to provide a retail forex customer with 30 days prior notice of any assignment of any position or transfer of any account of the retail forex customer. It also requires a national bank to which retail forex accounts or positions are assigned or transferred to provide the affected customers with risk disclosure statements and forms of acknowledgment and receive the signed acknowledgments within 60 days. The customer dispute resolution provisions in sectthinsp48.16 requires certain endorsements, acknowledgments, and signature language. Section 48.16 also requires that within 10 days after receipt of notice from the retail forex customer that the customer intends to submit a claim to arbitration, the national bank provides to the customer a list of persons qualified in the dispute resolution, and that the customer must notify the national bank of the person selected within 45 days of receipt of such list. Policies and Procedures Recordkeeping Sections 48.7 and 48.13(a) require that a national bank engaging in retail forex transactions keep full, complete, and systematic records and establish and implement internal rules, procedures, and controls. Section 48.7 also requires that a national bank keep account, financial ledger, transaction and daily records price logs records of methods used to determine bids or asked prices memorandum orders post-execution allocation of bunched orders records regarding its ratio of profitable accounts and possible violations of law records for noncash margin order tickets and monthly statements and confirmations. Section 48.9 requires policies and procedures for haircuts for noncash margin collected under the rules margin requirements and annual evaluations and modifications of the haircuts. Estimated PRA Burden Estimated Number of Respondents: 42 national banks 3 service providers. Total Reporting Burden: 672 hours. Total Disclosure Burden: 54,166 hours. Total Recordkeeping Burden: 12,416 hours. Total Annual Burden: 67,254 hours. C. Unfunded Mandates Reform Act of 1995 Section 202 of the Unfunded Mandates Reform Act of 1995 (Unfunded Mandates Act), 2 U. S.C. 1532. requires that an agency prepare a budgetary impact statement before promulgating any rule likely to result in a Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of 100 million or more in any one year. If a budgetary impact statement is required, section 205 of the Unfunded Mandates Act also requires an agency to identify and consider a reasonable number of regulatory alternatives before promulgating a rule. The OCC has determined that this rule will not result in expenditures by State, local, and tribal governments, or by the private sector, of 100 million or more in any one year. 50 Accordingly, this final rule is not subject to section 202 of the Unfunded Mandates Act. D. Effective Date Under the Administrative Procedures Act This final rule takes effect on July 15, 2011. 5 U. S.C. 553 (d)(1) requires publication of a substantive rule not less than 30 days before its effective date, except in cases in which the rule grants or recognizes an exemption or relieves a restriction. Section 2(c)(2)(E)(ii) of the CEA would prohibit national banks from engaging in retail forex transactions unless this final rule becomes effective on July 16, 2011. This final rule would relieve that restriction and allow national banks to continue to engage in retail forex transactions without delay. Furthermore, under 5 U. S.C. 553 (d)(3), an agency may find good cause to publish a rule less than 30 days before its effective date. The OCC finds such good cause, as the 30-day delayed effective date is unnecessary under the provisions of the final rule. In sectthinsp48.4(c) of the final rule, the OCC allows national banks a 30-day grace period to inform the OCC of its retail forex activity, along with up to a six-month window to comply with the provisions of the retail forex rule. E. Effective Date Under the CDRI Act The Riegle Community Development and Regulatory Improvement Act of 1994 (CDRI Act), 12 U. S.C. 4801 et seq., provides that new regulations that impose additional reporting or disclosure requirements on insured depository institutions do not take effect until the first day of a calendar quarter after the regulation is published, unless the agency determines there is good cause for the regulation to become effective at an earlier date. The OCC finds good cause that this final rule should become effective on July 15, 2011, as it would be in the public interest to require the disclosure and consumer protection provisions in this rule to take effect at this earlier date. If the rule did not become effective until October 1, 2011, then national banks would not be able to provide retail forex transactions to customers to meet their financial needs. Start List of Subjects List of Subjects in 12 CFR Part 48 For the reasons stated in the preamble, part 48 to Title 12, Chapter I of the Code of Federal Regulations is added to read as follows: PART 48mdashRETAIL FOREIGN EXCHANGE TRANSACTIONS 48.1 Authority, purpose, and scope. 48.2 Definitions. 48.3 Prohibited transactions. 48.4 Supervisory non-objection. 48.5 Application and closing out of offsetting long and short positions. 48.6 Disclosure. 48.7 Recordkeeping. 48.8 Capital requirements. 48.9 Margin requirements. 48.10 Required reporting to customers. 48.11 Unlawful representations. 48.12 Authorization to trade. 48.13 Trading and operational standards. 48.14 Supervision. 48.15 Notice of transfers. 48.16 Customer dispute resolution. 48.17 Reservation of authority. Authority, purpose, and scope. (a) Authority. A national bank may engage in retail foreign exchange transactions. A national bank engaging in such transactions must comply with the requirements of this part. (b) Purpose. This part establishes rules applicable to retail foreign exchange transactions engaged in by national banks and applies on or after the effective date. (c) Scope. Except as provided in paragraph (d) of this section, this part applies to national banks. (d) International applicability. Sections 48.3 and 48.5 to 48.16 do not apply to retail foreign exchange transactions between a foreign branch of a national bank and a non-U. S. customer. With respect to those transactions, the foreign branch remains Start Printed Page 41385 subject to any disclosure, recordkeeping, capital, margin, reporting, business conduct, documentation, and other requirements of foreign law applicable to the branch. In addition to the definitions in this section, for purposes of this part, the following terms have the same meaning as in the Commodity Exchange Act: ldquoAffiliated person of a futures commission merchantrdquo ldquoassociated personrdquo ldquocontract of salerdquo ldquocommodityrdquo ldquoeligible contract participantrdquo ldquofutures commission merchantrdquo ldquofuture deliveryrdquo ldquooptionrdquo ldquosecurityrdquo and ldquosecurity futures productrdquo. Affiliate has the same meaning as in section 2(k) of the Bank Holding Company Act of 1956 (12 U. S.C. 1841 (k)). Commodity Exchange Act means the Commodity Exchange Act (7 U. S.C. 1 et seq. ). Forex means foreign exchange. Identified banking product has the same meaning as in section 401(b) of the Legal Certainty for Bank Products Act of 2000 (7 U. S.C. 27 (b)). Institution-affiliated party or IAP has the same meaning as in section 3(u)(1), (2), or (3) of the Federal Deposit Insurance Act (12 U. S.C. 1813 (u)(1), (2), or (3)). Introducing broker means any person that solicits or accepts orders from a retail forex customer in connection with retail forex transactions. National bank means: (1) A national bank (2) A Federal branch or agency of a foreign bank, each as defined in 12 U. S.C. 3101 and (3) An operating subsidiary of a national bank or an operating subsidiary of a Federal branch or agency of a foreign bank. Related person, when used in reference to a retail forex counterparty, means: (1) Any general partner, officer, director, or owner of 10 percent or more of the capital stock of the retail forex counterparty (2) An associated person or employee of the retail forex counterparty, if the retail forex counterparty is not a national bank (3) An IAP of the retail forex counterparty, if the retail forex counterparty is a national bank and (4) A relative or spouse of any of the foregoing persons, or a relative of such spouse, who shares the same home as any of the foregoing persons. Retail foreign exchange dealer means any person other than a retail forex customer that is, or that offers to be, the counterparty to a retail forex transaction, except for a person described in item (aa), (bb), (cc)(AA), (dd), or (ff) of section 2(c)(2)(B)(i)(II) of the Commodity Exchange Act (7 U. S.C. 2 (c)(2)(B)(i)(II)). Retail forex account means the account of a retail forex customer, established with a national bank, in which retail forex transactions with the national bank as counterparty are undertaken, or the account of a retail forex customer that is established in order to enter into such transactions. Retail forex account agreement means the contractual agreement between a national bank and a retail forex customer that contains the terms governing the customers retail forex account with the national bank. Retail forex business means engaging in one or more retail forex transactions with the intent to derive income from those transactions, either directly or indirectly. Retail forex counterparty includes, as appropriate: (1) A national bank (2) A retail foreign exchange dealer (3) A futures commission merchant and (4) An affiliated person of a futures commission merchant. Retail forex customer means a customer that is not an eligible contract participant, acting on his, her, or its own behalf and engaging in retail forex transactions. Retail forex obligation means an obligation of a retail forex customer with respect to a retail forex transaction, including trading losses, fees, spreads, charges, and commissions. Retail forex proprietary account means: A retail forex account carried on the books of a national bank for one of the following persons a retail forex account of which 10 percent or more is owned by one of the following persons or a retail forex account of which an aggregate of 10 percent or more of which is owned by more than one of the following persons: (1) The national bank (2) An officer, director, or owner of 10 percent or more of the capital stock of the national bank or (3) An employee of the national bank, whose duties include: (i) The management of the national banks business (ii) The handling of the national banks retail forex transactions (iii) The keeping of records, including without limitation the software used to make or maintain those records, pertaining to the national banks retail forex transactions or (iv) The signing or co-signing of checks or drafts on behalf of the national bank (4) A spouse or minor dependent living in the same household as any of the foregoing persons or (5) An affiliate of the national bank. Retail forex transaction means an agreement, contract, or transaction in foreign currency, other than an identified banking product or a part of an identified banking product, that is offered or entered into by a national bank with a person that is not an eligible contract participant and that is: (1) A contract of sale of a commodity for future delivery or an option on such a contract (2) An option, other than an option executed or traded on a national securities exchange registered pursuant to section 6(a) of the Securities Exchange Act of 1934 (15 U. S.C. 78 (f)(a)) or (3) Offered or entered into on a leveraged or margined basis, or financed by a national bank, its affiliate, or any person acting in concert with the national bank or its affiliate on a similar basis, other than: (i) A security that is not a security futures product as defined in section 1a(47) of the Commodity Exchange Act (7 U. S.C. 1 a(47)) or (ii) A contract of sale that: (A) Results in actual delivery within two days or (B) Creates an enforceable obligation to deliver between a seller and buyer that have the ability to deliver and accept delivery, respectively, in connection with their line of business or (iii) An agreement, contract, or transaction that the OCC determines is not functionally or economically similar to: (A) A contract of sale of a commodity for future delivery or an option on such a contract or (B) An option, other than an option executed or traded on a national securities exchange registered pursuant to section 6(a) of the Securities Exchange Act of 1934 (15 U. S.C. 78 (f)(a)). (a) Fraudulent conduct prohibited. No national bank or its IAPs may, directly or indirectly, in or in connection with any retail forex transaction: (1) Cheat or defraud or attempt to cheat or defraud any person (2) Willfully make or cause to be made to any person any false report or statement or cause to be entered for any person any false record or Start Printed Page 41386 (3) Willfully deceive or attempt to deceive any person by any means whatsoever. (b) Acting as counterparty and exercising discretion prohibited. If a national bank can cause retail forex transactions to be effected for a retail forex customer without the retail forex customers specific authorization, then neither the national bank nor its affiliates may act as the counterparty for any retail forex transaction with that retail forex customer. (a) Supervisory non-objection required. Before commencing a retail forex business, a national bank must provide the OCC with prior notice and obtain from the OCC a written supervisory non-objection. (b) Requirements for obtaining supervisory non-objection. (1) In order to obtain a written supervisory non-objection, a national bank must: (i) Establish to the satisfaction of the OCC that the national bank has established and implemented written policies, procedures, and risk measurement and management systems and controls for the purpose of ensuring that it conducts retail forex transactions in a safe and sound manner and in compliance with this part and (ii) Provide such other information as the OCC may require. (2) The information provided under paragraph (b)(1) of this section must include, without limitation, information regarding: (i) Customer due diligence, including without limitation credit evaluations, customer appropriateness, and ldquoknow your customerrdquo documentation (ii) New product approvals (iii) The haircuts that the national bank will apply to noncash margin as provided in sectthinsp48.9(b)(2) and (iv) Conflicts of interest. (c) Treatment of existing retail forex businesses. A national bank that is engaged in a retail forex business on July 15, 2011, may continue to do so for up to six months, subject to an extension of time by the OCC, if it requests the supervisory non-objection required by paragraph (a) of this section within 30 days of July 15, 2011, and submits the information required to be submitted under paragraph (b) of this section. (d) Compliance with the Commodity Exchange Act. A national bank that is engaged in a retail forex business on July 15, 2011 and complies with paragraph (c) of this section will be deemed, during the six-month or extended period described in paragraph (c) of this section, to be acting pursuant to a rule or regulation described in section 2(c)(2)(E)(ii)(I) of the Commodity Exchange Act (7 U. S.C. 2 (c)(2)(E)(ii)(I)). Application and closing out of offsetting long and short positions. (a) Application of purchases and sales. Any national bank thatmdash (1) Engages in a retail forex transaction involving the purchase of any currency for the account of any retail forex customer when the account of such retail forex customer at the time of such purchase has an open retail forex transaction for the sale of the same currency (2) Engages in a retail forex transaction involving the sale of any currency for the account of any retail forex customer when the account of such retail forex customer at the time of such sale has an open retail forex transaction for the purchase of the same currency (3) Purchases a put or call option involving foreign currency for the account of any retail forex customer when the account of such retail forex customer at the time of such purchase has a short put or call option position with the same underlying currency, strike price, and expiration date as that purchased or (4) Sells a put or call option involving foreign currency for the account of any retail forex customer when the account of such retail forex customer at the time of such sale has a long put or call option position with the same underlying currency, strike price, and expiration date as that sold must: (i) Immediately apply such purchase or sale against such previously held opposite transaction and (ii) Promptly furnish such retail forex customer with a statement showing the financial result of the transactions involved and the name of any introducing broker to the account. (b) Close-out against oldest open position. In all instances in which the short or long position in a customers retail forex account immediately prior to an offsetting purchase or sale is greater than the quantity purchased or sold, the national bank must apply such offsetting purchase or sale to the oldest portion of the previously held short or long position. (c) Transactions to be applied as directed by customer. Notwithstanding paragraphs (a) and (b) of this section, to the extent the national bank allows retail forex customers to use other methods of offsetting retail forex transactions, the offsetting transaction must be applied as directed by a retail forex customers specific instructions. These instructions may not be made by the national bank or an IAP of the national bank. (a) Risk disclosure statement required. No national bank may open or maintain open an account that will engage in retail forex transactions for a retail forex customer unless the national bank has furnished the retail forex customer with a separate written disclosure statement containing only the language set forth in paragraph (d) of this section and the disclosures required by paragraphs (e) and (f) of this section. (b) Acknowledgment of risk disclosure statement required. The national bank must receive from the retail forex customer a written acknowledgment signed and dated by the customer that the customer received and understood the written disclosure statement required by paragraph (a) of this section. (c) Placement of risk disclosure statement. The disclosure statement may be attached to other documents as the initial page(s) of such documents and as the only material on such page(s). (d) Content of risk disclosure statement. The language set forth in the written disclosure statement required by paragraph (a) of this section is as follows: Risk Disclosure Statement Retail forex transactions involve the leveraged trading of contracts denominated in foreign currency with a national bank as your counterparty. Because of the leverage and the other risks disclosed here, you can rapidly lose all of the funds or property you pledge to the national bank as margin for retail forex trading. You may lose more than you pledge as margin. If your margin falls below the required amount, and you fail to provide the required additional margin, your national bank is required to liquidate your retail forex transactions. Your national bank cannot apply your retail forex losses to any of your assets or liabilities at the bank other than funds or property that you have pledged as margin for retail forex transactions. However, if you lose more money than you have pledged as margin, the bank may seek to recover that deficiency in an appropriate forum, such as a court of law. You should be aware of and carefully consider the following points before determining whether retail forex trading is appropriate for you. (1) Trading is not on a regulated market or exchangemdashyour national bank is your trading counterparty and has conflicting interests. The retail forex transaction you are entering into is not conducted on an interbank market nor is it conducted on a futures exchange subject to regulation as a designated contract market by the Commodity Futures Trading Commission. The foreign currency trades you transact are trades with your national bank as Start Printed Page 41387 the counterparty. When you sell, the national bank is the buyer. When you buy, the national bank is the seller. As a result, when you lose money trading, your national bank is making money on such trades, in addition to any fees, commissions, or spreads the national bank may charge. (2) An electronic trading platform for retail foreign currency transactions is not an exchange. It is an electronic connection for accessing your national bank. The terms of availability of such a platform are governed only by your contract with your national bank. Any trading platform that you may use to enter into off-exchange foreign currency transactions is only connected to your national bank. You are accessing that trading platform only to transact with your national bank. You are not trading with any other entities or customers of the national bank by accessing such platform. The availability and operation of any such platform, including the consequences of the unavailability of the trading platform for any reason, is governed only by the terms of your account agreement with the national bank. (3) You may be able to offset or liquidate any trading positions only through your banking entity because the transactions are not made on an exchange or regulated contract market, and your national bank may set its own prices. Your ability to close your transactions or offset positions is limited to what your national bank will offer to you, as there is no other market for these transactions. Your national bank may offer any prices it wishes, including prices derived from outside sources or not in its discretion. Your national bank may establish its prices by offering spreads from third-party prices, but it is under no obligation to do so or to continue to do so. Your national bank may offer different prices to different customers at any point in time on its own terms. The terms of your account agreement alone govern the obligations your national bank has to you to offer prices and offer offset or liquidating transactions in your account and make any payments to you. The prices offered by your national bank may or may not reflect prices available elsewhere at any exchange, interbank, or other market for foreign currency. (4) Paid solicitors may have undisclosed conflicts. The national bank may compensate introducing brokers for introducing your account in ways that are not disclosed to you. Such paid solicitors are not required to have, and may not have, any special expertise in trading and may have conflicts of interest based on the method by which they are compensated. You should thoroughly investigate the manner in which all such solicitors are compensated and be very cautious in granting any person or entity authority to trade on your behalf. You should always consider obtaining dated written confirmation of any information you are relying on from your national bank in making any trading or account decisions. (5) Retail forex transactions are not insured by the Federal Deposit Insurance Corporation. (6) Retail forex transactions are not a deposit in, or guaranteed by, a national bank. (7) Retail forex transactions are subject to investment risks, including possible loss of all amounts invested. Finally, you should thoroughly investigate any statements by any national bank that minimize the importance of, or contradict, any of the terms of this risk disclosure. These statements may indicate sales fraud. This brief statement cannot, of course, disclose all the risks and other aspects of trading off-exchange foreign currency with a national bank. I hereby acknowledge that I have received and understood this risk disclosure statement. Signature of Customer (e)(1) Disclosure of profitable accounts ratio. Immediately following the language set forth in paragraph (d) of this section, the statement required by paragraph (a) of this section must include, for each of the most recent four calendar quarters during which the national bank maintained retail forex customer accounts: (i) The total number of retail forex customer accounts maintained by the national bank over which the national bank does not exercise investment discretion (ii) The percentage of such accounts that were profitable for retail forex customer accounts during the quarter and (iii) The percentage of such accounts that were not profitable for retail forex customer accounts during the quarter. (2) The national banks statement of profitable trades must include the following legend: ldquoPast performance is not necessarily indicative of future results. rdquo Each national bank must provide, upon request, to any retail forex customer or prospective retail forex customer the total number of retail forex accounts maintained by the national bank for which the national bank does not exercise investment discretion, the percentage of such accounts that were profitable, and the percentage of such accounts that were not profitable for each calendar quarter during the most recent five-year period during which the national bank maintained such accounts. (f) Disclosure of fees and other charges. Immediately following the language required by paragraph (e) of this section, the statement required by paragraph (a) of this section must include: (1) The amount of any fee, charge, spread, or commission that the national bank may impose on the retail forex customer in connection with a retail forex account or retail forex transaction (2) An explanation of how the national bank will determine the amount of such fees, charges, spreads, or commissions and (3) The circumstances under which the national bank may impose such fees, charges, spreads, or commissions. (g) Future disclosure requirements. If, with regard to a retail forex customer, the national bank changes any fee, charge, or commission required to be disclosed under paragraph (f) of this section, then the national bank must mail or deliver to the retail forex customer a notice of the changes at least 15 days prior to the effective date of the change. (h) Form of disclosure requirements. The disclosures required by this section must be clear and conspicuous and designed to call attention to the nature and significance of the information provided. (i) Other disclosure requirements unaffected. This section does not relieve a national bank from any other disclosure obligation it may have under applicable law. (a) General rule. A national bank engaging in retail forex transactions must keep full, complete, and systematic records, together with all pertinent data and memoranda, pertaining to its retail forex business, including the following 6 types of records: (1) Retail forex account records. For each retail forex account: (i) The name and address of the person for whom the account is carried or introduced and the principal occupation or business of the person (ii) The name of any other person guaranteeing the account or exercising trading control with respect to the account (iii) The establishment or termination of the account (iv) A means to identify the person that has solicited and is responsible for the account (v) The funds in the account, net of any commissions and fees (vi) The accounts net profits and losses on open trades (vii) The funds in the account plus or minus the net profits and losses on open trades, adjusted for the net option value in the case of open options positions (viii) Financial ledger records that show all charges against and credits to the account, including deposits, withdrawals, and transfers, and charges or credits resulting from losses or gains on closed transactions and (ix) A list of all retail forex transactions executed for the account, Start Printed Page 41388 with the details specified in paragraph (a)(2) of this section. (2) Retail forex transaction records. For each retail forex transaction: (i) The date and time the national bank received the order (ii) The price at which the national bank placed the order, or, in the case of an option, the premium that the retail forex customer paid (iii) The customer account identification information (iv) The currency pair (v) The size or quantity of the order (vi) Whether the order was a buy or sell order (vii) The type of order, if the order was not a market order (viii) The size and price at which the order is executed, or in the case of an option, the amount of the premium paid for each option purchased, or the amount credited for each option sold (ix) For options, whether the option is a put or call, expiration date, quantity, underlying contract for future delivery or underlying physical, strike price, and details of the purchase price of the option, including premium, mark-up, commission, and fees and (x) For futures, the delivery date and (xi) If the order was made on a trading platform: (A) The price quoted on the trading platform when the order was placed, or, in the case of an option, the premium quoted (B) The date and time the order was transmitted to the trading platform and (C) The date and time the order was executed. (3) Price changes on a trading platform. If a trading platform is used, daily logs showing each price change on the platform, the time of the change to the nearest second, and the trading volume at that time and price. (4) Methods or algorithms. Any method or algorithm used to determine the bid or asked price for any retail forex transaction or the prices at which customer orders are executed, including, but not limited to, any markups, fees, commissions or other items which affect the profitability or risk of loss of a retail forex customers transaction. (5) Daily records which show for each business day complete details of: (i) All retail forex transactions that are futures transactions executed on that day, including the date, price, quantity, market, currency pair, delivery date, and the person for whom such transaction was made (ii) All retail forex transactions that are option transactions executed on that day, including the date, whether the transaction involved a put or call, the expiration date, quantity, currency pair, delivery date, strike price, details of the purchase price of the option, including premium, mark-up, commission and fees, and the person for whom the transaction was made and (iii) All other retail forex transactions executed on that day for such account, including the date, price, quantity, currency and the person for whom such transaction was made. (6) Other records. Written acknowledgments of receipt of the risk disclosure statement required by sectthinsp48.6(b), offset instructions pursuant to sectthinsp48.5(c), records required under paragraphs (b) through (f) of this section, trading cards, signature cards, street books, journals, ledgers, payment records, copies of statements of purchase, and all other records, data, and memoranda that have been prepared in the course of the national banks retail forex business. (b) Ratio of profitable accounts. (1) With respect to its active retail forex customer accounts over which it did not exercise investment discretion and that are not retail forex proprietary accounts open for any period of time during the quarter, a national bank must prepare and maintain on a quarterly basis (calendar quarter): (i) A calculation of the percentage of such accounts that were profitable (ii) A calculation of the percentage of such accounts that were not profitable and (iii) Data supporting the calculations described in paragraphs (b)(1)(i) and (ii) of this section. (2) In calculating whether a retail forex account was profitable or not profitable during the quarter, the national bank must compute the realized and unrealized gains or losses on all retail forex transactions carried in the retail forex account at any time during the quarter, subtract all fees, commissions, and any other charges posted to the retail forex account during the quarter, and add any interest income and other income or rebates credited to the retail forex account during the quarter. All deposits and withdrawals of funds made by the retail forex customer during the quarter must be excluded from the computation of whether the retail forex account was profitable or not profitable during the quarter. Computations that result in a zero or negative number must be considered a retail forex account that was not profitable. Computations that result in a positive number must be considered a retail forex account that was profitable. (3) A retail forex account must be considered ldquoactiverdquo for purposes of paragraph (b)(1) of this section if and only if for the relevant calendar quarter a retail forex transaction was executed in that account or the retail forex account contained an open position resulting from a retail forex transaction. (c) Records related to violations of law. A national bank engaging in retail forex transactions must make a record of all communications received by the national bank or its IAPs concerning facts giving rise to possible violations of law related to the national banks retail forex business. The record must contain: The name of the complainant, if provided the date of the communication the relevant agreement, contract, or transaction the substance of the communication the name of the person that received the communication and the final disposition of the matter. (d) Records for noncash margin. A national bank must maintain a record of all noncash margin collected pursuant to sectthinsp48.9. The record must show separately for each retail forex customer: (1) A description of the securities or property received (2) The name and address of such retail forex customer (3) The dates when the securities or property were received (4) The identity of the depositories or other places where such securities or property are segregated or held, if applicable (5) The dates in which the national bank placed or removed such securities or property into or from such depositories and (6) The dates of return of such securities or property to such retail forex customer, or other disposition thereof, together with the facts and circumstances of such other disposition. (e) Order Tickets. (1) Except as provided in paragraph (e)(2) of this section, immediately upon the receipt of a retail forex transaction order, a national bank must prepare an order ticket for the order (whether unfulfilled, executed, or canceled). The order ticket must include: (i) Account identification (account or customer name with which the retail forex transaction was effected) (ii) Order number (iii) Type of order (market order, limit order, or subject to special instructions) (iv) Date and time, to the nearest minute, that the retail forex transaction order was received (as evidenced by time-stamp or other timing device) (v) Time, to the nearest minute, that the retail forex transaction order was executed and (vi) Price at which the retail forex transaction was executed. (2) Post-execution allocation of bunched orders. Specific identifiers for Start Printed Page 41389 retail forex accounts included in bunched orders need not be recorded at time of order placement or upon report of execution as required under paragraph (e)(1) of this section if the following requirements are met: (i) The national bank placing and directing the allocation of an order eligible for post-execution allocation has been granted written investment discretion with regard to participating customer accounts and makes the following information available to retail forex customers upon request: (A) The general nature of the post-execution allocation methodology the national bank will use (B) Whether the national bank has any interest in accounts that may be included with customer accounts in bunched orders eligible for post-execution allocation and (C) Summary or composite data sufficient for that customer to compare the customers results with those of other comparable customers and, if applicable, any account in which the national bank has an interest. (ii) Post-execution allocations are made as soon as practicable after the entire transaction is executed (iii) Post-execution allocations are fair and equitable, with no account or group of accounts receiving consistently favorable or unfavorable treatment and (iv) The post-execution allocation methodology is sufficiently objective and specific to permit the OCC to verify the fairness of the allocations using that methodology. (f) Record of monthly statements and confirmations. A national bank must retain a copy of each monthly statement and confirmation required by sectthinsp48.10. (g) Form of record and manner of maintenance. The records required by this section must clearly and accurately reflect the information required and provide an adequate basis for the audit of the information. A national bank must create and maintain audio recordings of oral orders and oral offset instructions. Record maintenance may include the use of automated or electronic records provided that the records are easily retrievable and readily available for inspection. (h) Length of maintenance. A national bank must keep each record required by this section for at least five years from the date the record is created. A national bank offering or entering into retail forex transactions must be well capitalized as defined by 12 CFR part 6 . (a) Margin required. A national bank engaging, or offering to engage, in retail forex transactions must collect from each retail forex customer an amount of margin not less than: (1) Two percent of the notional value of the retail forex transaction for major currency pairs and 5 percent of the notional value of the retail forex transaction for all other currency pairs (2) For short options, 2 percent for major currency pairs and 5 percent for all other currency pairs of the notional value of the retail forex transaction, plus the premium received by the retail forex customer or (3) For long options, the full premium charged and received by the national bank. (b)(1) Form of margin. Margin collected under paragraph (a) of this section or pledged by a retail forex customer for retail forex transactions must be in the form of cash or the following financial instruments: (i) Obligations of the United States and obligations fully guaranteed as to principal and interest by the United States (ii) General obligations of any State or of any political subdivision thereof (iii) General obligations issued or guaranteed by any enterprise, as defined in 12 U. S.C. 4502 (10) (iv) Certificates of deposit issued by an insured depository institution, as defined in section 3(c)(2) of the Federal Deposit Insurance Act (12 U. S.C. 1813 (c)(2)) (v) Commercial paper (vi) Corporate notes or bonds (vii) General obligations of a sovereign nation (viii) Interests in money market mutual funds and (ix) Such other financial instruments as the OCC deems appropriate. (2) Haircuts. A national bank must establish written policies and procedures that include: (i) Haircuts for noncash margin collected under this section and (ii) Annual evaluation, and, if appropriate, modification, of the haircuts. (c) Separate margin account. Margin collected by the national bank from a retail forex customer for retail forex transactions or pledged by a retail forex customer for retail forex transactions must be placed into a separate account. (d) Margin calls liquidation of position. (1) For each retail forex customer, at least once per day, a national bank must: (i) Mark the value of the retail forex customers open retail forex positions to market (ii) Mark the value of the margin collected under this section from the retail forex customer to market and (iii) Determine whether, based on the marks in paragraphs (d)(1)(i) and (ii) of this section, the national bank has collected margin from the retail forex customer sufficient to satisfy the requirements of this section. (2) If, pursuant to paragraph (d)(1)(iii) of this section, the national bank determines that it has not collected margin from the retail forex customer sufficient to satisfy the requirements of this section then, within a reasonable period of time, the national bank must either: (i) Collect margin from the retail forex customer sufficient to satisfy the requirements of this section or (ii) Liquidate the retail forex customers retail forex transactions. (e) Set-off prohibited. A national bank may not: (1) Apply a retail forex customers retail forex obligations against any funds or other asset of the retail forex customer other than margin in the separate margin account described in paragraph (c) of this section (2) Apply a retail forex customers retail forex obligations to increase the amount owed by the retail forex customer to the national bank under any loan or (3) Collect the margin required under this section by use of any right of set-off. Required reporting to customers. (a) Monthly statements. Each national bank must promptly furnish to each retail forex customer, as of the close of the last business day of each month or as of any regular monthly date selected, except for accounts in which there are neither open positions at the end of the statement period nor any changes to the account balance since the prior statement period but, in any event, not less frequently than once every three months, a statement that clearly shows: (1) For each retail forex customer: (i) The open retail forex transactions with prices at which acquired (ii) The net unrealized profits or losses in all open retail forex transactions marked to the market (iii) Any money, securities, or other property in the separate margin account required by sectthinsp48.9(c) and (iv) A detailed accounting of all financial charges and credits to the retail forex customers retail forex accounts during the monthly reporting period, including: Money, securities, or property received from or disbursed to such customer realized profits and losses and fees, charges, spreads, and commissions. Start Printed Page 41390 (2) For each retail forex customer engaging in retail forex transactions that are options: (i) All such options purchased, sold, exercised, or expired during the monthly reporting period, identified by underlying retail forex transaction or underlying currency, strike price, transaction date, and expiration date (ii) The open option positions carried for such customer and arising as of the end of the monthly reporting period, identified by underlying retail forex transaction or underlying currency, strike price, transaction date, and expiration date (iii) All such option positions marked to the market and the amount each position is in the money, if any (iv) Any money, securities, or other property in the separate margin account required by sectthinsp48.9(c) and (v) A detailed accounting of all financial charges and credits to the retail forex customers retail forex accounts during the monthly reporting period, including: Money, securities, or property received from or disbursed to such customer realized profits and losses premiums and mark-ups and fees, charges, and commissions. (b) Confirmation statement. Each national bank must, not later than the next business day after any retail forex transaction, send: (1) To each retail forex customer, a written confirmation of each retail forex transaction caused to be executed by it for the customer, including offsetting transactions executed during the same business day and the rollover of an open retail forex transaction to the next business day (2) To each retail forex customer engaging in forex option transactions, a written confirmation of each forex option transaction, containing at least the following information: (i) The retail forex customers account identification number (ii) A separate listing of the actual amount of the premium, as well as each markup thereon, if applicable, and all other commissions, costs, fees, and other charges incurred in connection with the forex option transaction (iii) The strike price (iv) The underlying retail forex transaction or underlying currency (v) The final exercise date of the forex option purchased or sold and (vi) The date that the forex option transaction was executed. (3) To each retail forex customer engaging in forex option transactions, upon the expiration or exercise of any option, a written confirmation statement thereof, which statement must include the date of such occurrence, a description of the option involved, and, in the case of exercise, the details of the retail forex or physical currency position that resulted therefrom including, if applicable, the final trading date of the retail forex transaction underlying the option. (c) Notwithstanding paragraph (b) of this section, a retail forex transaction that is caused to be executed for a pooled investment vehicle that engages in retail forex transactions need be confirmed only to the operator of such pooled investment vehicle. (d) Controlled accounts. With respect to any account controlled by any person other than the retail forex customer for whom such account is carried, each national bank must promptly furnish in writing to such other person the information required by paragraphs (a) and (b) of this section. (e) Introduced accounts. Each statement provided pursuant to the provisions of this section must, if applicable, show that the account for which the national bank was introduced by an introducing broker and the name of the introducing broker. (a) No implication or representation of limiting losses. No national bank engaged in retail foreign exchange transactions or its IAPs may imply or represent that it will, with respect to any retail customer forex account, for or on behalf of any person: (1) Guarantee such person or account against loss (2) Limit the loss of such person or account or (3) Not call for or attempt to collect margin as established for retail forex customers. (b) No implication of representation of engaging in prohibited acts. No national bank or its IAPs may in any way imply or represent that it will engage in any of the acts or practices described in paragraph (a) of this section. (c) No Federal government endorsement. No national bank or its IAPs may represent or imply in any manner whatsoever that any retail forex transaction or retail forex product has been sponsored, recommended, or approved by the OCC, the Federal government, or any agency thereof. (d) Assuming or sharing of liability from bank error. This section does not prevent a national bank from assuming or sharing in the losses resulting from the national banks error or mishandling of a retail forex transaction. (e) Certain guaranties unaffected. This section does not affect any guarantee entered into prior to the effective date of this part, but this section does apply to any extension, modification, or renewal thereof entered into after such date. Authorization to trade. (a) Specific authorization required. No national bank may directly or indirectly effect a retail forex transaction for the account of any retail forex customer unless, before the retail forex transaction occurs, the retail forex customer specifically authorized the national bank to effect the retail forex transaction. (b) Requirements for specific authorization. A retail forex transaction is ldquospecifically authorizedrdquo for purposes of this section if the retail forex customer specifies: (1) The precise retail forex transaction to be effected (2) The exact amount of the foreign currency to be purchased or sold and (3) In the case of an option, the identity of the foreign currency or contract that underlies the option. Trading and operational standards. (a) Internal rules, procedures, and controls required. A national bank engaging in retail forex transactions must establish and implement internal policies, procedures, and controls designed, at a minimum, to: (1) Ensure, to the extent reasonable, that each retail forex transaction that is executable at or near the price that the national bank has quoted to the retail forex customer is entered for execution before any retail forex transaction for: (i) A proprietary account (ii) An account for which a related person may originate orders without the prior specific consent of the account owner, if the related person has gained knowledge of the retail forex customers order prior to the transmission of an order for a proprietary account (iii) An account in which a related person has an interest, if the related person has gained knowledge of the retail forex customers order prior to the transmission of an order for a proprietary account or (iv) An account in which a related person may originate orders without the prior specific consent of the account owner, if the related person has gained knowledge of the retail forex customers order prior to the transmission of an order for a proprietary account (2) Prevent national-bank related persons from placing orders, directly or indirectly, with another person in a manner designed to circumvent the provisions of paragraph (a)(1) of this section and (3) Fairly and objectively establish settlement prices for retail forex transactions. Start Printed Page 41391 (b) Disclosure of retail forex transactions. No national bank engaging in retail forex transactions may disclose that an order of another person is being held by the national bank, unless the disclosure is necessary to the effective execution of such order or the disclosure is made at the request of the OCC. (c) Handling of retail forex accounts of related persons of retail forex counterparties. No national bank engaging in retail forex transactions may knowingly handle the retail forex account of an employee of another retail forex counterpartys retail forex business unless the national bank: (1) Receives written authorization from a person designated by the other retail forex counterparty with responsibility for the surveillance over the account pursuant to paragraph (a)(2) of this section (2) Prepares immediately upon receipt of an order for the account a written record of the order, including the account identification and order number, and records thereon to the nearest minute, by time-stamp or other timing device, the date and time the order was received and (3) Transmits on a regular basis to the other retail forex counterparty copies of all statements for the account and of all written records prepared upon the receipt of orders for the account pursuant to paragraph (c)(2) of this section. (d) Related person of national bank establishing account at another retail forex counterparty. No related person of a national bank working in the national banks retail forex business may have an account, directly or indirectly, with another retail forex counterparty unless the other retail forex counterparty: (1) Receives written authorization to open and maintain the account from a person designated by the national bank with responsibility for the surveillance over the account pursuant to paragraph (a)(2) of this section and (2) Transmits on a regular basis to the national bank copies of all statements for the account and of all written records prepared by the other retail forex counterparty upon receipt of orders for the account pursuant to paragraph (a)(2) of this section. (e) Prohibited trading practices. No national bank engaging in retail forex transactions may: (1) Enter into a retail forex transaction, to be executed pursuant to a market or limit order at a price that is not at or near the price at which other retail forex customers, during that same time period, have executed retail forex transactions with the national bank (2) Adjust or alter prices for a retail forex transaction after the transaction has been confirmed to the retail forex customer (3) Provide to a retail forex customer a new bid price for a retail forex transaction that is higher than its previous bid without providing a new asked price that is also higher than its previous asked price by a similar amount (4) Provide to a retail forex customer a new bid price for a retail forex transaction that is lower than its previous bid without providing a new asked price that is also lower than its previous asked price by a similar amount or (5) Establish a new position for a retail forex customer (except one that offsets an existing position for that retail forex customer) where the national bank holds outstanding orders of other retail forex customers for the same currency pair at a comparable price. (a) Supervision by the national bank. A national bank engaging in retail forex transactions must diligently supervise the handling by its officers, employees, and agents (or persons occupying a similar status or performing a similar function) of all retail forex accounts carried, operated, or advised by at the national bank and all activities of its officers, employees, and agents (or persons occupying a similar status or performing a similar function) relating to its retail forex business. (b) Supervision by officers, employees, or agents. An officer, employee, or agent of a national bank must diligently supervise his or her subordinates handling of all retail forex accounts at the national bank and all the subordinates activities relating to the national banks retail forex business. Notice of transfers. (a) Prior notice generally required. Except as provided in paragraph (b) of this section, a national bank must provide a retail forex customer with 30 days prior notice of any assignment of any position or transfer of any account of the retail forex customer. The notice must include a statement that the retail forex customer is not required to accept the proposed assignment or transfer and may direct the national bank to liquidate the positions of the retail forex customer or transfer the account to a retail forex counterparty of the retail forex customers selection. (b) Exceptions. The requirements of paragraph (a) of this section do not apply to transfers: (1) Requested by the retail forex customer (2) Made by the Federal Deposit Insurance Corporation as receiver or conservator under the Federal Deposit Insurance Act or (3) Otherwise authorized by applicable law. (c) Obligations of transferee national bank. A national bank to which retail forex accounts or positions are assigned or transferred under paragraph (a) of this section must provide to the affected retail forex customers the risk disclosure statements and forms of acknowledgment required by this part and receive the required signed acknowledgments within 60 days of such assignments or transfers. This requirement does not apply if the national bank has clear written evidence that the retail forex customer has received and acknowledged receipt of the required disclosure statements. Customer dispute resolution. (a) Voluntary submission of claims to dispute or settlement procedures. No national bank may enter into any agreement or understanding with a retail forex customer in which the customer agrees, prior to the time a claim or grievance arises, to submit such claim or grievance to any settlement procedure unless the following conditions are satisfied: (1) Signing the agreement is not a condition for the customer to use the services offered by the national bank. (2) If the agreement is contained as a clause or clauses of a broader agreement, the customer separately endorses the clause or clauses. (3) The agreement advises the retail forex customer that, at such time as the customer notifies the national bank that the customer intends to submit a claim to arbitration, or at such time the national bank notifies the customer of its intent to submit a claim to arbitration, the customer will have the opportunity to choose a person qualified in dispute resolution to conduct the proceeding. (4) The agreement must acknowledge that the national bank will pay any incremental fees that may be assessed in connection with the dispute resolution, unless it is determined in the proceeding that the retail forex customer has acted in bad faith in initiating the proceeding. (5) The agreement must include the following language printed in large boldface type: Two forums exist for the resolution of disputes related to retail forex transactions: Civil court litigation and arbitration conducted by a private Start Printed Page 41392 organization. The opportunity to settle disputes by arbitration may in some cases provide benefits to customers, including the ability to obtain an expeditious and final resolution of disputes without incurring substantial cost. Each customer must individually examine the relative merits of arbitration and consent to this arbitration agreement must be voluntary. By signing this agreement, you: (1) May be waiving your right to sue in a court of law and (2) are agreeing to be bound by arbitration of any claims or counterclaims that you or insert name of national bank may submit to arbitration under this agreement. In the event a dispute arises, you will be notified if insert name of national bank intends to submit the dispute to arbitration. You need not sign this agreement to open or maintain a retail forex account with insert name of national bank. (b) Election of forum. (1) Within 10 business days after receipt of notice from the retail forex customer that the customer intends to submit a claim to arbitration, the national bank must provide the customer with a list of persons qualified in dispute resolution. (2) The customer must, within 45 days after receipt of such list, notify the national bank of the person selected. The customers failure to provide such notice must give the national bank the right to select a person from the list. (c) Enforceability. A dispute settlement procedure may require parties using the procedure to agree, under applicable state law, submission agreement, or otherwise, to be bound by an award rendered in the procedure if the agreement to submit the claim or grievance to the procedure complies with paragraph (a) of this section or the agreement to submit the claim or grievance to the procedure was made after the claim or grievance arose. Any award so rendered by the procedure will be enforceable in accordance with applicable law. (d) Time limits for submission of claims. The dispute settlement procedure used by the parties may not include any unreasonably short limitation period foreclosing submission of a customers claims or grievances or counterclaims. (e) Counterclaims. A procedure for the settlement of a retail forex customers claims or grievances against a national bank or employee thereof may permit the submission of a counterclaim in the procedure by a person against whom a claim or grievance is brought if the counterclaim: (1) Arises out of the transaction or occurrence that is the subject of the retail forex customers claim or grievance and (2) Does not require for adjudication the presence of essential witnesses, parties, or third persons over which the settlement process lacks jurisdiction. Reservation of authority. The OCC may modify the disclosure, recordkeeping, capital and margin, reporting, business conduct, documentation, or other standards or requirements under this part for a specific retail forex transaction or a class of retail forex transactions if the OCC determines that the modification is consistent with safety and soundness and the protection of retail forex customers. End Part Start Signature Dated: July 7, 2011. Acting Comptroller of the Currency. End Signature End Supplemental Information 2. thinspDodd-Frank Act sectthinsp742(c)(2) (to be codified at 7 U. S.C. 2 (c)(2)(E)). In this preamble, citations to the retail forex statutory provisions are to the sections in which the provisions will be codified in the CEA. 3. thinspThe CEA defines ldquofinancial institutionrdquo as including ldquoa depository institution (as defined in section 3 of the Federal Deposit Insurance Act (12 U. S.C. 1813 )).rdquo 7 U. S.C. 1 a(21)(E). National banks are depository institutions. See 12 U. S.C. 1813 (a)(1) and (c)(1). 4. thinspFor purposes of the retail forex rules, ldquoFederal regulatory agencyrdquo includes ldquoan appropriate Federal banking agency. rdquo 7 U. S.C. 2 (c)(2)(E)(i)(III). The OCC is the appropriate Federal banking agency for national banks and Federal branches and agencies of foreign banks. 12 U. S.C. 1813 (q)(1) Dodd-Frank Act sectthinsp721(a)(2) (amending 7 U. S.C. 1 a to define ldquoappropriate Federal banking agencyrdquo by reference to 12 U. S.C. 1813 ). 5. thinspA retail customer is a person that is not an ldquoeligible contract participantrdquo under the CEA. 10. thinsp See Dodd-Frank Act sectthinsp754. 11. thinspDodd-Frank Act sectthinsp312. 12. thinsp Regulation of Off-Exchange Retail Foreign Exchange Transactions and Intermediaries, 75 FR 55409 (Sept. 10, 2010) (Final CFTC Retail Forex Rule). The CFTC proposed these rules prior to the enactment of the Dodd-Frank Act. Regulation of Off-Exchange Retail Foreign Exchange Transactions and Intermediaries, 75 FR 3281 (Jan. 20, 2010) (Proposed CFTC Retail Forex Rule). 13. thinspRetail Foreign Exchange Transactions, 76 FR 22633 (Apr. 22, 2011) (Proposed OCC Retail Forex Rule). 14. thinspRetail Foreign Exchange Transactions, 76 FR 28358 (May 17, 2011) (Proposed FDIC Retail Forex Rule). 15. thinsp See OCC Bulletin 94-13 (Feb. 24, 1994) see also OCC Bulletin 1995-52 (Sept. 22, 1995). 16. thinspThere are, of course, differences in the regulations that generally govern national banks versus those that govern CFTC registrants, such as capital rules. The NDIP Policy Statement, because it governs bank activities more generally, is similar to capital rules. 17. thinspThe definition of ldquoeligible contract participantrdquo is found in the CEA and is discussed below. 22. thinsp See generally CFTC v. Intl Fin. Servs. (New York), Inc., 323 F. Supp. 2d 482, 495 (S. D.N. Y. 2004) (distinguishing between foreign exchange futures contracts and spot contracts in foreign exchange, and noting that foreign currency trades settled within two days are ordinarily spot transactions rather than futures contracts) see also Bank Brussels Lambert v. Intermetals Corp., 779 F. Supp. 741, 748 (S. D.N. Y. 1991). 23. thinsp See 7 U. S.C. 2 (c)(2)(C)(i)(II)(bb)(BB) CFTC v. Intl Fin. Servs. (New York), Inc., 323 F. Supp. 2d 482, 495 (S. D.N. Y. 2004) (distinguishing between forward contracts in foreign exchange and foreign exchange futures contracts) see also William L. Stein, The Exchange-Trading Requirement of the Commodity Exchange Act, 41 Vand. L. Rev. 473, 491 (1988). In contrast to forward contracts, futures contracts generally include several or all of the following characteristics: (i) Standardized nonnegotiable terms (other than price and quantity) (ii) parties are required to deposit initial margin to secure their obligations under the contract (iii) parties are obligated and entitled to pay or receive variation margin in the amount of gain or loss on the position periodically over the period the contract is outstanding (iv) purchasers and sellers are permitted to close out their positions by selling or purchasing offsetting contracts and (v) settlement may be provided for by either (a) cash payment through a clearing entity that acts as the counterparty to both sides of the contract without delivery of the underlying commodity or (b) physical delivery of the underlying commodity. See Edward F. Greene et al. U. S. Regulation of International Securities and Derivatives Markets sectthinsp14.082 (8th ed. 2006). 24. thinsp CFTC v. Zelener, 373 F.3d 861 (7th Cir. 2004) see also CFTC v. Erskine, 512 F.3d 309 (6th Cir. 2008). 25. thinsp7 U. S.C. 2 (c)(2)(E)(iii) (requiring that retail forex rules treat all functionally or economically similar transactions similarly) see 17 CFR 5.1 (m) (defining ldquoretail forex transactionrdquo for CFTC-registered retail forex dealers). 26. thinspFor example, in Zelener, the retail forex dealer retained the right, at the date of delivery of the currency to deliver the currency, roll the transaction over, or offset all or a portion of the transaction with another open position held by the customer. See CFTC v. Zelener, 373 F.3d 861, 868 (7th Cir. 2004). 27. thinsp See, e. g. CFTC v. Erskine, 512 F.3d 309, 326 (6th Cir. 2008) CFTC v. Zelener, 373 F.3d 861, 869 (7th Cir. 2004). 30. thinsp7 U. S.C. 27 a(a)(1). An identified banking product offered by a national bank could become subject to the CEA if the OCC determines, in consultation with the CFTC and the Securities and Exchange Commission, that the product would meet the definition of a ldquoswaprdquo under the CEA or a ldquosecurity-based swaprdquo under Securities Exchange Act of 1934 and has become known to the trade as a swap or security-based swap, or otherwise has been structured as an identified banking product for the purpose of evading the provisions of the CEA, the Securities Act of 1933, or the Securities Exchange Act of 1934. 7 U. S.C. 27 a(b). 31. thinsp7 U. S.C. 27 (b) (citing Gramm-Leach-Bliley Act sectthinsp206(a)(1) to (5)). 32. thinspThe term ldquoeligible contract participantrdquo is defined at 7 U. S.C. 1 a(18), and for purposes most relevant to this rule generally includes: (a) A corporation, partnership, proprietorship, organization, trust, or other entitymdash (1) That has total assets exceeding 10,000,000 (2) The obligations of which under an agreement, contract, or transaction are guaranteed or otherwise supported by a letter of credit or keepwell, support, or other agreement by certain other eligible contract participants or (i) Has a net worth exceeding 1,000,000 and (ii) Enters into an agreement, contract, or transaction in connection with the conduct of the entitys business or to manage the risk associated with an asset or liability owned or incurred or reasonably likely to be owned or incurred by the entity in the conduct of the entitys business (b) Subject to certain exclusions, (1) A governmental entity (including the United States, a State, or a foreign government) or political subdivision of a governmental entity (2) A multinational or supranational governmental entity and (3) An instrumentality, agency, or department of an entity described in (b)(1) or (2) and (c) An individual who has amounts invested on a discretionary basis, the aggregate of which is in excess ofmdash (2) 5,000,000 and who enters into the agreement, contract, or transaction in order to manage the risk associated with an asset owned or liability incurred, or reasonably likely to be owned or incurred, by the individual. 34. thinspProposed CFTC Retail Forex Rule, 75 FR at 3287 n.54. 44. thinsp See National Futures Association, Forex Transactions: A Regulatory Guide 17 (Feb. 2011) Federal Reserve Bank of New York, Survey of North American Foreign Exchange Volume tbl. 3e (Jan. 2011) Bank for International Settlements, Report on Global Foreign Exchange Market Activity in 2010 at 15 tbl. B.6 (Dec. 2010). 45. thinspThe Final CFTC Retail Forex Rule similarly does not define ldquomajor currency. rdquo 46. thinspThe final rule clarifies that the prohibition on setting off retail forex ldquolossesrdquo in the proposed rule was meant to include costs related to retail forex transactions, such as fees, spreads, charges, and commissions. 48. thinspSmall Business Administration regulations define ldquosmall entitiesrdquo to include banks with a four-quarter average of total assets of 175 million or less. 13 CFR 121.201 . 50. thinspIn particular, the OCC notes that forex transactions between national banks and governmental entities are not retail forex transactions subject to this rule, because governmental entities are eligible contract participants. See 7 U. S.C. 1 a(18)(A)(vii). FR Doc. 2011-17514 Filed 7-13-11 8:45 am BILLING CODE 4810-33-PThis site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them. The full functionality of our site is not supported on your browser version, or you may have compatibility mode selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox. IFRS 13 Fair Value Measurement Quick Article Links IFRS 13 Fair Value Measurement applies to IFRSs that require or permit fair value measurements or disclosures and provides a single IFRS framework for measuring fair value and requires disclosures about fair value measurement. The Standard defines fair value on the basis of an exit price notion and uses a fair value hierarchy, which results in a market-based, rather than entity-specific, measurement. IFRS 13 was originally issued in May 2011 and applies to annual periods beginning on or after 1 January 2013. History of IFRS 13 Project on fair value measurement added to the IASBs agenda Discussion Paper Fair Value Measurements published Comment deadline 2 April 2007 Exposure Draft Fair Value Measurement published Comment deadline 28 September 2009 Exposure Draft Measurement Uncertainty Analysis Disclosure for Fair Value Measurements published Comment deadline 7 September 2010 Staff draft of a IFRS on fair value measurement released IFRS 13 Fair Value Measurement issued Effective for annual periods beginning on or after 1 January 2013 Amended by Annual Improvements to IFRSs 20102012 Cycle (short-term receivables and payables) Amendment to the basis for conclusions only Amended by Annual Improvements to IFRSs 20112013 Cycle (scope of portfolio exception in paragraph 52) Effective for annual period beginning on or after 1 July 2014 Related Interpretations Amendments under consideration by the IASB In addition, the IASB has signalled an intention to conduct a post-implementation review of IFRS 13, commencing in 2015. Publications and resources Summary of IFRS 13 IFRS 13: IFRS 13:1 defines fair value sets out in a single IFRS a framework for measuring fair value requires disclosures about fair value measurements. IFRS 13 applies when another IFRS requires or permits fair value measurements or disclosures about fair value measurements (and measurements, such as fair value less costs to sell, based on fair value or disclosures about those measurements), except for: IFRS 13:5-7 share-based payment transactions within the scope of IFRS 2 Share-based Payment leasing transactions within the scope of IAS 17 Leases measurements that have some similarities to fair value but that are not fair value, such as net realisable value in IAS 2 Inventories or value in use in IAS 36 Impairment of Assets . Additional exemptions apply to the disclosures required by IFRS 13. Key definitions IFRS 13:Appendix A Fair value The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date Active market A market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis Exit price The price that would be received to sell an asset or paid to transfer a liability Highest and best use The use of a non-financial asset by market participants that would maximise the value of the asset or the group of assets and liabilities (e. g. a business) within which the asset would be used Most advantageous market The market that maximises the amount that would be received to sell the asset or minimises the amount that would be paid to transfer the liability, after taking into account transaction costs and transport costs Principal market The market with the greatest volume and level of activity for the asset or liability Fair value hierarchy IFRS 13 seeks to increase consistency and comparability in fair value measurements and related disclosures through a fair value hierarchy. The hierarchy categorises the inputs used in valuation techniques into three levels. The hierarchy gives the highest priority to (unadjusted) quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. IFRS 13:72 If the inputs used to measure fair value are categorised into different levels of the fair value hierarchy, the fair value measurement is categorised in its entirety in the level of the lowest level input that is significant to the entire measurement (based on the application of judgement). IFRS 13:73 Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date. IFRS 13:76 A quoted market price in an active market provides the most reliable evidence of fair value and is used without adjustment to measure fair value whenever available, with limited exceptions. IFRS 13:77 If an entity holds a position in a single asset or liability and the asset or liability is traded in an active market, the fair value of the asset or liability is measured within Level 1 as the product of the quoted price for the individual asset or liability and the quantity held by the entity, even if the markets normal daily trading volume is not sufficient to absorb the quantity held and placing orders to sell the position in a single transaction might affect the quoted price. IFRS 13:80 Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. IFRS 13:81 Level 2 inputs include: quoted prices for similar assets or liabilities in active markets quoted prices for identical or similar assets or liabilities in markets that are not active inputs other than quoted prices that are observable for the asset or liability, for example interest rates and yield curves observable at commonly quoted intervals implied volatilities credit spreads inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs). Level 3 inputs inputs are unobservable inputs for the asset or liability. IFRS 13:86 Unobservable inputs are used to measure fair value to the extent that relevant observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. An entity develops unobservable inputs using the best information available in the circumstances, which might include the entitys own data, taking into account all information about market participant assumptions that is reasonably available. IFRS 13:87-89 Measurement of fair value Overview of fair value measurement approach The objective of a fair value measurement is to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions. A fair value measurement requires an entity to determine all of the following: IFRS 13:B2 the particular asset or liability that is the subject of the measurement (consistently with its unit of account) for a non-financial asset, the valuation premise that is appropriate for the measurement (consistently with its highest and best use) the principal (or most advantageous) market for the asset or liability the valuation technique(s) appropriate for the measurement, considering the availability of data with which to develop inputs that represent the assumptions that market participants would use when pricing the asset or liability and the level of the fair value hierarchy within which the inputs are categorised. Guidance on measurement IFRS 13 provides the guidance on the measurement of fair value, including the following: An entity takes into account the characteristics of the asset or liability being measured that a market participant would take into account when pricing the asset or liability at measurement date (e. g. the condition and location of the asset and any restrictions on the sale and use of the asset) IFRS 13:11 Fair value measurement assumes an orderly transaction between market participants at the measurement date under current market conditions IFRS 13:15 Fair value measurement assumes a transaction taking place in the principal market for the asset or liability, or in the absence of a principal market, the most advantageous market for the asset or liability IFRS 13:24 A fair value measurement of a non-financial asset takes into account its highest and best use IFRS 13:27 A fair value measurement of a financial or non-financial liability or an entitys own equity instruments assumes it is transferred to a market participant at the measurement date, without settlement, extinguishment, or cancellation at the measurement date IFRS 13:34 The fair value of a liability reflects non-performance risk (the risk the entity will not fulfil an obligation), including an entitys own credit risk and assuming the same non-performance risk before and after the transfer of the liability IFRS 13:42 An optional exception applies for certain financial assets and financial liabilities with offsetting positions in market risks or counterparty credit risk, provided conditions are met (additional disclosure is required). IFRS 13:48, IFRS 13:96 An entity uses valuation techniques appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. IFRS 13:61, IFRS 13:67 The objective of using a valuation technique is to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants and the measurement date under current market conditions. Three widely used valuation techniques are: IFRS 13:62 market approach uses prices and other relevant information generated by market transactions involving identical or comparable (similar) assets, liabilities, or a group of assets and liabilities (e. g. a business) cost approach reflects the amount that would be required currently to replace the service capacity of an asset (current replacement cost) income approach converts future amounts (cash flows or income and expenses) to a single current (discounted) amount, reflecting current market expectations about those future amounts. In some cases, a single valuation technique will be appropriate, whereas in others multiple valuation techniques will be appropriate. IFRS 13:63 Disclosure IFRS 13 requires an entity to disclose information that helps users of its financial statements assess both of the following: IFRS 13:91 for assets and liabilities that are measured at fair value on a recurring or non-recurring basis in the statement of financial position after initial recognition, the valuation techniques and inputs used to develop those measurements for fair value measurements using significant unobservable inputs (Level 3 ), the effect of the measurements on profit or loss or other comprehensive income for the period. The disclosure requirements are not required for: IFRS 13:7 plan assets measured at fair value in accordance with IAS 19 Employee Benefits retirement benefit plan investments measured at fair value in accordance with IAS 26 Accounting and Reporting by Retirement Benefit Plans assets for which recoverable amount is fair value less costs of disposal in accordance with IAS 36 Impairment of Assets . Identification of classes Where disclosures are required to be provided for each class of asset or liability, an entity determines appropriate classes on the basis of the nature, characteristics and risks of the asset or liability, and the level of the fair value hierarchy within which the fair value measurement is categorised. IFRS 13:94 Determining appropriate classes of assets and liabilities for which disclosures about fair value measurements should be provided requires judgement. A class of assets and liabilities will often require greater disaggregation than the line items presented in the statement of financial position. The number of classes may need to be greater for fair value measurements categorised within Level 3 . Some disclosures are differentiated on whether the measurements are: Recurring fair value measurements fair value measurements required or permitted by other IFRSs to be recognised in the statement of financial position at the end of each reporting period Non-recurring fair value measurements are fair value measurements that are required or permitted by other IFRSs to be measured in the statement of financial position in particular circumstances. Specific disclosures required To meet the disclosure objective. the following minimum disclosures are required for each class of assets and liabilities measured at fair value (including measurements based on fair value within the scope of this IFRS) in the statement of financial position after initial recognition (note these are requirements have been summarised and additional disclosure is required where necessary): IFRS 13:93 the fair value measurement at the end of the reporting period for non-recurring fair value measurements, the reasons for the measurement the level of the fair value hierarchy within which the fair value measurements are categorised in their entirety (Level 1, 2 or 3) for assets and liabilities held at the reporting date that are measured at fair value on a recurring basis, the amounts of any transfers between Level 1 and Level 2 of the fair value hierarchy, the reasons for those transfers and the entitys policy for determining when transfers between levels are deemed to have occurred, separately disclosing and discussing transfers into and out of each level for fair value measurements categorised within Level 2 and Level 3 of the fair value hierarchy, a description of the valuation technique(s) and the inputs used in the fair value measurement, any change in the valuation techniques and the reason(s) for making such change (with some exceptions) for fair value measurements categorised within Level 3 of the fair value hierarchy, quantitative information about the significant unobservable inputs used in the fair value measurement (with some exceptions) for recurring fair value measurements categorised within Level 3 of the fair value hierarchy, a reconciliation from the opening balances to the closing balances, disclosing separately changes during the period attributable to the following: total gains or losses for the period recognised in profit or loss, and the line item(s) in profit or loss in which those gains or losses are recognised separately disclosing the amount included in profit or loss that is attributable to the change in unrealised gains or losses relating to those assets and liabilities held at the end of the reporting period, and the line item(s) in profit or loss in which those unrealised gains or losses are recognised total gains or losses for the period recognised in other comprehensive income, and the line item(s) in other comprehensive income in which those gains or losses are recognised purchases, sales, issues and settlements (each of those types of changes disclosed separately) the amounts of any transfers into or out of Level 3 of the fair value hierarchy, the reasons for those transfers and the entitys policy for determining when transfers between levels are deemed to have occurred. Transfers into Level 3 shall be disclosed and discussed separately from transfers out of Level 3 for fair value measurements categorised within Level 3 of the fair value hierarchy, a description of the valuation processes used by the entity for recurring fair value measurements categorised within Level 3 of the fair value hierarchy: a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs if a change in those inputs to a different amount might result in a significantly higher or lower fair value measurement. If there are interrelationships between those inputs and other unobservable inputs used in the fair value measurement, the entity also provides a description of those interrelationships and of how they might magnify or mitigate the effect of changes in the unobservable inputs on the fair value measurement for financial assets and financial liabilities, if changing one or more of the unobservable inputs to reflect reasonably possible alternative assumptions would change fair value significantly, an entity shall state that fact and disclose the effect of those changes. The entity shall disclose how the effect of a change to reflect a reasonably possible alternative assumption was calculated if the highest and best use of a non-financial asset differs from its current use, an entity shall disclose that fact and why the non-financial asset is being used in a manner that differs from its highest and best use. in the list above indicates that the disclosure is also applicable to a class of assets or liabilities which is not measured at fair value in the statement of financial position but for which the fair value is disclosed. IFRS 13:97 Quantitative disclosures are required to be presented in a tabular format unless another format is more appropriate. IFRS 13:99 Effective date and transition IFRS 13:Appendix C IFRS 13 is applicable to annual reporting periods beginning on or after 1 January 2013. An entity may apply IFRS 13 to an earlier accounting period, but if doing so it must disclose the fact. Application is required prospectively as of the beginning of the annual reporting period in which the IFRS is initially applied. Comparative information need not be disclosed for periods before initial application. Material on this website is 2016 Deloitte Global Services Limited, or a member firm of Deloitte Touche Tohmatsu Limited, or one of their related entities. See Legal for additional copyright and other legal information. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (DTTL), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as Deloitte Global) does not provide services to clients. Please see deloitte/about for a more detailed description of DTTL and its member firms. Correction list for hyphenation These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. 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