The US National Futures Association (NFA), the self-regulatory organization overseeing the activities of the US forex brokers, said it is raising the required minimum security deposit for transactions with the GBP from 2% to 5%.
As per a notice published on NFA's website and requiring the immediate attention of its Forex Dealer Members (FDMs), from November 7, until further notice, the minimum deposit the forex brokers must have is 5% of the notional value of the transactions with forex pairs containing the British pound.
Up until now the British pound was in the company of the Swiss franc, Canadian dollar, Japanese yen, Euro, Australian dollar, New Zealand dollar, Swedish krona, Norwegian krone, and Danish krone for which is valid the 2% requirement.
According to the NFA, the reason for the hike are “the recent events involving the UK exiting the European Union (Brexit)”.
The timing of the decision strikes as somewhat strange, considering that since June 24 when it became clear that the UK is poised to leave the EU, the British pound has experienced high market volatility and several historical lows. Last week, however, it regained some of its lost ground, when UK's High Court ruled that the government cannot trigger Article 50 before parliament's approval.
It is also worth noting that the GBP/USD is the third most traded forex pair, after the EUR/USD, USD/JPY.
The NFA is the self-regulatory organization of the US derivatives industry, i.e. on-exchange traded futures, forex and swaps. Membership in NFA is mandatory. Currently the organization has around 4100 firms and 57 000 associates.