By Benjamin Goad - 04/08/13 07:09 PM EDT
The new rule, to be published in Tuesday’s Federal Register, is among more than 200 regulations to be implemented as part of the landmark Dodd-Frank Wall Street reform law.
It establishes a set of requirements for risk disclosures to customers, recordkeeping, business conduct, and documentation for retail foreign exchange transactions involving an array of currencies from dollars and euros, to francs and yen.
Similar to rules adopted by other financial regulators, the Fed’s rule requires banks to alert the Board before engaging in the practice and prohibits them from knowingly deceiving customers.
The rule, to take effect on May 13, was developed with help from the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.
The language is available here.