Futures Market Rules and Regulations

Any financial undertaking necessitates becoming familiar with the rules concerning the venture. Trading in the forex and futures markets are no exception. A prospective futures trader should know what his rights are, and what actions are not allowed.

Futures rules and regulations are numerous to say the least, but the following are some of the pertinent legal facts that you need to be aware of.

For your futures transactions to be valid, your forex broker must be legitimate. To verify the legal status of your broker, go to the website of the National Futures Association. The site lists all broker members and also posts any disciplinary actions taken against members.

All forex brokerage firms, land based or online, should include in its account sign up sheet a statement indicating the risks of future trading. There should also be an analysis of whether your present financial status permits you to engage in futures trading. If these statements are missing, there is something amiss in that futures firm.

In accordance with CFTC (Commodity Futures Trading Commission) rules on forex and futures trading, there should be an email (or snail mail) sent to you upon the completion of the transaction. The period for the letter to arrive is two days.

Other futures rules and regulations also apply to other aspects of forex trading. These include the prohibition from buying or selling futures other than those specified in the contract; all futures trading must be in writing; and of course, all the transactions must be under the supervisions of a futures exchange registered with the CFTC. All the writing concerned with the futures transactions are open to the CFTC and the Department of Justice for investigation, should the need arise.

If at any point during your trading transaction you were subjected to an unfair practice by your broker, your best legal recourse is to go to the CFTC or the NFA. The CFTC is the primary government agency responsible for monitoring commodities futures trading. The NFA (National Futures Association) is the organization that supports and protects the rights of investors in the United States.

There is no question that researching the regulations concerning forex and futures rules and regulations takes some effort, but it can, and must be done. The Internet has made information concerning this matter easily available, and there is no reason why it cannot be undertaken.

This overview of the futures rules and regulations are, as stated earlier, not meant to be comprehensive, but it should be sufficient to guide you in futures transactions, and to ensure that everything will be conducted legally.

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