SECTION 11. FOREX DEALER MEMBER FINANCIAL REQUIREMENTS.
[Adopted Effective December 1, 2003. Effective dates of amendments: November 30, 2005; July 31, 2006; August 9, 2006; February 13, 2007; March 31, 2007; May 7, 2007; December 17, 2007; December 21, 2007; October 31, 2008; and November 30, 2009.]
(a) Each Forex Dealer Member must maintain "Adjusted Net Capital" (as defined in CFTC Regulation 1.17) equal to or in excess of the greatest of:
(i) $10,000,000 through January 16, 2009, $15,000,000 from January 17, 2009 through May 15, 2009, and $20,000,000 from May 16, 2009 forward;
(ii) the amount required by subsection (a)(i) above plus 5% of all liabilities owed to customers (as customer is defined in Compliance Rule 2-36(i)) exceeding $10,000,000, except that any Forex Dealer Member that uses straight-through-processing for all customer transactions is not subject to this requirement; or
(iii) For FCMs, any other amount required by Section 1 of these Financial Requirements.
(b) A Forex Dealer Member may not include assets held by an affiliate (unless approved by NFA) or an unregulated person in its current assets for purposes of determining its adjusted net capital under CFTC Rule 1.17. An affiliate is any person that controls, is controlled by, or is under common control with the Forex Dealer Member.
For purposes of this section and section (c), a person is unregulated unless it is:
(i) a financial institution regulated by a U.S. banking regulator;
(ii) a broker-dealer registered with the U.S. Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority;
(iii) a futures commission merchant registered with the U.S. Commodity Futures Trading Commission and a Member of NFA;
(iv) a retail foreign exchange dealer registered with the U.S. Commodity Futures Trading Commission and a Member of NFA;
(v) an insurance company regulated by any U.S. state;
(vi) an entity regulated as a foreign equivalent of any of the above if regulated in a money center country as defined in CFTC Regulation 1.49; or
(vii) any other entity approved by NFA.
(c) A Forex Dealer Member may not use an affiliate (unless approved by NFA) or an unregulated person, as defined in section (b), to cover its currency positions for purposes of CFTC Rule 1.17(c)(5).
(d) Each RFED must file financial reports with NFA for each month-end, including its fiscal year-end, within 17 business days of the date for which the report is prepared. All financial reports must be filed on the forms required by CFTC regulations, and all financial reports except those required to be certified by a Certified Public Accountant must be filed electronically using an electronic media approved by NFA.
(e) For purposes of this rule:
(1) "Forex" has the same meaning as in Bylaw 1507(b);
(2) "Forex Dealer Member" has the same meaning as in Bylaw 306; and
(3) As used in section (c), "currency" refers to open foreign currency positions with counterparties regardless of whether those counterparties are eligible contract participants as defined in Section 1a(12) of the Act.