The echo of January's SNBomb explosion can still be heard even now. A news by Bloomberg today (29/5) reported, US NFA has sent to CFTC a proposal that calls for measures to mitigate similar cases in the future.

The echo of January's SNBomb explosion can still be heard even now. A news by Bloomberg today (29/5) reported, US National Futures Association (NFA) has sent to US Commodity Futures Trading Commission (CFTC) a proposal that calls for measures to mitigate similar cases in the future. NFA proposal is a subject to approval by the CFTC.

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US forex industry are largely less-influenced by the Swiss National Bank-induced calamity compared to its New Zealand and UK counterparts. However, one of its leading brokerage house, FXCM, lost an estimated amount of 225 million USD at the time and afterward has to agree to an expensive private bailout to get out of the red. It is mentioned that it was caused by losses in FXCM's UK arm which had more lenient oversight for leverage. Hence NFA proposed changes in order to better strengthen forex brokers against overseas risks.

According to the report, under the new proposal, Dealers would have to hold more capital in trades with large customers and foreign affiliates... The rules also would require currency dealers to have more expansive risk-management programs and reporting requirements.

Multiple license-holder FXCM is one of the brokers with largest market share in the world. According to an industry report by CitiFX dated January 2014, FXCM wield 9% of global retail forex broker market share, third only after GMO Click Securities and DMM.com Securities. It even holds license in the US, the region well-known as having strictest rules, amongst which are leverage cap at 1:50 and prohibition of funding trading account using credit card. If the recent NFA proposal is approved by CFTC, it will probably increase the difficulties experienced by brokers to get US license to another level.