Foreign Exchange Dealers Coalition
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The Foreign Exchange Dealers Coalition (FXDC) is an alliance of the largest U.S. foreign exchange market dealers. The FXDC partnership was formed in the fall of 2007 to pool together industry resources to demonstrate the viability of the forex industry and to ensure fair regulation and oversight that does not hamper freedom of choice, innovation or job creation.
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[edit] What is a forex dealer?
A forex dealer provides online trading services to allow individuals to speculate on rapidly changing foreign exchange rates. Forex Dealer Members (FDMs) are regulated by the Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA) in the United States, as well as by national and local regulatory bodies where they conduct business, and are held to stringent business and ethical standards.
The public has recognized U.S. forex companies as leaders in technology, with three of the leading forex firms named to the Deloitte Technology Fast 500[1], a ranking of the top North American technology companies, for three consecutive years. The leading U.S. forex companies have also been named to the Inc. 500 list of the country’s fastest growing companies. In 2006, the top FX companies made up nearly 20 percent of the total number of financial services industry firms on the Inc. 500 list[2]. As indicated by these rankings, the popularity of this growing market with active traders has helped to make foreign exchange one of the fastest growing industries in the United States.
[edit] Government and self-regulation
For many years, the foreign exchange industry was unregulated in the United States. Regulation was long overdue, especially in light of the fact that foreign exchange trading had been regulated in such locales as Hong Kong and London for over a decade (citation?). Some rules were formally put in place when the President signed and Congress passed the Commodities Futures Modernization Act[3] in December 2000, which regulated the retail foreign exchange industry for the first time.
In the U.S., forex firms [4] are members of the CFTC and the self-regulating National Futures Association (NFA), operating under the same guidelines set forth for FCMs in the futures brokerage business. Other developed countries have effectively regulated the OTC foreign exchange market, and each member believes that the U.S. can do this as well.
On a regular basis, all forex dealers submit financial reports to its regulators and are subject to lengthy regulatory audits covering everything from marketing practices to employee training regimens. In addition, many of these long-established regulatory bodies extend specific regulations solely to retail forex dealers[5], such as higher capital requirements[5], disclosure statements and the requirement that all dealers disclose to customers that their funds may not be safe in the event of bankruptcy.
[edit] Worldwide leaders in technology
The retail forex market has thrived since its inception. The entrepreneurial members of the FXDC that began this industry have continued to push each other and push the envelope, expanding their reach to more than 140 countries to compete and excel in the global marketplace. This very competition has benefited individuals in service and value as market technology rapidly evolves to provide traders with the latest equipment and tools for online trading.
The leading forex companies have become global leaders; the dominant players in the forex market are based in the United States. These companies took the age-old process of on-exchange trading and shaped it into something new. The fast-paced nature of the industry has led to rapid innovations in technology; customers can now monitor and trade the markets 24 hours a day while placing orders almost instantly with sophisticated desktop trading software, from any computer via a web browser, or even from their mobile phones.
