(a) Notification required. Before commencing a retail forex business,
a banking institution shall provide the Board with prior written notice
in compliance with this section. The notice will become effective
60 days after a complete notice is received by the Board, provided
the Board does not request additional information or object in writing.
In the event the Board requests additional information, the notice
will become effective 60 days after all information requested by the
Board is received by the Board unless the Board objects in writing.
(b) Notification requirements. A banking institution shall provide the following in its written
notification:
(1) Information concerning customer due
diligence, including without limitation credit evaluations, customer
appropriateness, and “know your customer” documentation;
(2) The haircuts to be applied
to noncash margin as provided in 240.9(b)(2);
(3) Information concerning new product
approvals;
(4) Information
on addressing conflicts of interest; and
(5) A resolution by the banking institution’s
Board of Directors that the banking institution has established and
implemented written policies, procedures, and risk measurement and
management systems and controls for the purpose of ensuring that it
conducts retail forex transactions in a safe and sound manner and
in compliance with this part.
(c) Treatment of existing retail forex businesses. A banking institution that is engaged in a retail forex business
on the effective date of this part may continue to do so, until and
unless the Board objects in writing, so long as the institution submits
the information required to be submitted under paragraphs (b)(1) through
(5) of this section within 30 days of the effective date of this part,
subject to an extension of time by the Board, and such additional
information as requested by the Board thereafter.
(d) Compliance with the Commodity Exchange
Act. A banking institution that is engaged in a retail forex
business on the effective date of this part and complies with paragraph
(c) of this section shall be deemed to be acting pursuant to a rule
or regulation described in section 2(c)(2)(E)(ii)(I) of the Commodity
Exchange Act (7 U.S.C. 2(c)(2)(E)(ii)(I)).
