Senators Elizabeth Warren (D-MA) and Mark Warner (D-VA), along with Representative Elijah Cummings (D-MD), introduced new legislation that would amend the Commodity Exchange Act (CEA) to require the Commodity Futures Trading Commission (CFTC) to impose fees, increase civil penalties, mandate that FX swaps and FX forwards be treated as swaps (reversing the Treasury Determination), and tighten swap data reporting and capital requirements, among other new obligations.

Last Friday, the US Securities and Exchange Commission (SEC) issued a notice stating that, effective in less than 70 days (July 31), broker-dealers will no longer be able to engage in leveraged foreign exchange (forex or FX) business with persons other than “eligible contract participants” as defined in Section 1a(18) of the Commodity Exchange Act (CEA), including those that are dually registered with the US Commodity Futures Trading Commission (CFTC) as Futures Commission Merchants (FCMs). What this effectively means is that only standalone CFTC registered and National Futures Association (NFA) member FCMs or retail FX dealers, as well as certain banks, may serve as counterparties in retail forex transactions.