Alert August 02, 2011

OCC Adopts Final Retail Forex Rule; FRB Issues Proposed Retail Forex Rule

As Required by a Dodd-Frank Act amendment to the Commodity Exchange Act to enable national banks, Federal branches and agencies of foreign banks and their operating subsidiaries (“National Banks”) to continue to engage in certain off-exchange transactions in foreign currency with retail customers, the OCC issued a final rule (the “OCC Final Rule“) authorizing National Banks to continue to engage in such activities.  Similarly, the FRB issued a proposed rule (the “FRB Proposed Rule“) that would authorize state member banks, bank and financial holding companies, Edge Act and agreement corporations and uninsured state-licensed branches and agencies of foreign banks to engage in the above described retail foreign exchange activities. 

The OCC Final Rule became effective on July 15, 2011 and a National Bank engaged in a retail forex business prior to July 15, 2011 must request by August 14, 2011 supervisory confirmation of non-objection to the National Bank’s continuing to engage in such activities.  Comments on the FRB Proposed Rule are due by October 11, 2011.