OANDA Gets a $500,000 CFTC Penalty Over Minimum Capital Lapses

The US Commodity Futures Trading Commission (CFTC) has hit with a $500,000 fine for failing to adhere to certain regulations, including that it failed to meet minimum capital requirements.
CFTC has issued an order filing and simultaneously settling charges against the Canada-based firm, which is one of a handful of that operate as a CFTC-registered retail foreign exchange dealer (RFED) and futures commission merchant (FCM).

The charges were that failed to meet the minimum financial requirements for RFEDs and FCMs and violated the equity withdrawal restriction resulted from making dividend payments on three occasions.
Each of these violations, the order finds, was a result of OANDA’s inadequate internal controls and its failure to supervise matters related to handling its business compliance as a CFTC registrant.
As such, OANDA did not fully recognize this shortfall, as well as the fact that it was actually undercapitalized during the relevant time, in October 2018 and during the period from April 2019 to August 2019.
CFTC credits OANDA for cooperation
The order further explains that OANDA violated CFTC minimum financial requirements by making three prohibited dividend payments on October 15, 2018, April 26, 2019, and May 28, 2019.
To resolve the , OANDA agreed to pay a fine and, among other things, cease and desist from further violations of its capital requirements.
Under CFTC regulations, a retail forex firm must at all times maintain adjusted net capital (ANC) of $20 million, or more in certain circumstances. Events triggering a shortfall in these requirements typically require filings within very short time periods.
The watchdog said that in settling the matter, it took into account OANDA’s cooperation in the investigation and the corrective actions the company undertook after its deficiencies were discovered. It also found no indication that OANDA customers suffered losses as a result of the firm’s net capital and equity withdrawal lapses.
“Capital requirements are a cornerstone of the regulatory framework governing CFTC-regulated intermediaries and we will continue to monitor firms for compliance with these important rules,” added Division of Swap Dealer and Intermediary Oversight Director Joshua B. Sterling.
is a multi-regulated broker with offices in Toronto, Europe, and the Asia Pacific region. The ‎company operates an FX trading platform utilized by a mix of retail and institutional investors. ‎It also provides currency information services to individuals, large corporations, and portfolio ‎managers.‎

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