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NFA Slaps $1.1m Fine on FXDD over Unfavorable Slippage

The National Futures Association (NFA), the watchdog responsible for US brokers, on September 18 published a decision that imposes heavy financial penalties on FXDD, the brokerage, over faulty slippage practices.

 
The broker has agreed to settle charges, which means that it neither admits or denies any guilt, but the company will still have to pay certain amounts of money. 
 
For starters, FXDD will make $1,828,261 in restitution payments to clients affected by its unfair slippage practices which led to problems with the execution of the so-called “limit-fill-or-kill” orders: as their name suggests, these orders imply either complete execution at a desired price or cancellation. The breaches were committed in the period from December 10, 2009 to June 29, 2011.
 
But this is not the end of the financial penalties for FXDD in relation to illicit actions. The broker will also have to pay a fine of $1,095,119 to the NFA, with the bulk of the fine reflecting the unfavorable slippage practices just mentioned. On top of this, the watchdog found that FXDD had failed to implement an adequate anti-money laundering (AML) mechanism and had implemented improper price adjustments in clients' accounts. Add to this the accusation that the broker had provided inaccurate and misleading information to the regulators, and you'll see why the fine is so hefty. 
 
FXDD has 15 days after the publication of the decision to make the necessary payments. 
 
This regulatory decision adds weight to the tough image of the NFA, which has been acting rather harshly on FX brokers lately. Let me remind you that just a couple of months ago, new and stricter requirements for net capital of futures commission merchants (FCMs) came into effect. This watchdog is not playing games.
 
 

About FXDD

 
FXDD, a Foreign Exchange Dealer registered with the CFTC and a member of the National Futures Association (NFA), is headquartered in New York City's 7 World Trade Center.  FXDD is a leader in online Forex trading dedicated to providing superior customer service, powerful trading technology, and reliable streaming liquidity. FXDD provides services to individual and institutional traders, hedge funds, commercial entities, brokerage firms and money managers around the world. FXDD offers 24-hour Forex trading by way of its trading platforms, which include: MetaTrader, PowerTrader, Mirror Trader, and FXDDTrader. The Company's services currently provide competitive interbank pricing, no-interest accounts, and fully-automated execution. FXDD also provides 50:1 leverage in the US, as well as competitive bid-to-ask spreads.
TAGS: fxdd  fxdd fcm  fxdd forex broker  us broker  united states forex  us forex regulation  nfa  national futures association  nfa fxdd  fforex fine  forex slippage 

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