National Futures Association, or "NFA," the futures industry funded self-regulatory organization, has approved banning the use of credit cards to fund retail foreign exchange ("forex") and futures accounts. The move comes amid increasing regulatory scrutiny of retail futures transactions, especially involving forex. The proposed ban, which would be contained in an interpretive notice to NFA Compliance Rules 2-4 and 2-36, must be approved by the Commodity Futures Trading Commission before it can become effective. The proposal stems from an NFA study of forex dealer members' business practices. A review of about 15,500 retail forex accounts showed that an "overwhelming" number of them were funded by small retail customers using a credit card or borrowed funds, NFA said. Moreover, a majority of credit-funded forex accounts were unprofitable, NFA added. "Forex and futures markets are both high-risk and volatile, and individuals who wish to participate should use only risk capital
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