NFA To Probe FX Traders Practices

The National Futures Association is planning to investigate whether foreign-exchange firms are using unfair trading practices to take advantage of retail investors.

The National Futures Association (NFA) is planning to investigate whether foreign-exchange firms are using unfair trading practices to take advantage of retail investors, The Wall Street Journal reports. It is looking to determine if firms are designing computer systems to take advantage of “slippage,” or small price movements that happen between the time a customer orders a trade and when that trade is actually executed. The NFA will be looking to see if trades are being executed only when the currency price moves in the firm’s favor. This will indicate whether a firm is violating NFA rules mandating fair business practices. The regulator will review all the trades executed on a daily basis.

Click here for the story from The Wall Street Journal.