OANDA Corporation, the New York-based forex dealer now owned by prop trading giant FTMO, has been fined $600,000 by the National Futures Association (NFA) following a series of compliance violations. The penalty stems from deficiencies in capital management, customer protection, and supervisory oversight.

The case was resolved through a settlement, with OANDA neither admitting nor denying the charges. However, the NFA's Business Conduct Committee (BCC) found the firm responsible for breaching several key compliance rules.

Capital Shortfalls and Improper Affiliate Transactions

One of the most serious allegations involves OANDA’s miscalculation of its net capital. The firm failed to increase its capital by 10% of the liabilities owed to counterparties, a regulatory requirement. In addition, OANDA incorrectly offset transactions with an affiliated entity and neglected to collect required security deposits, leading to a shortfall below the NFA's minimum capital thresholds.

Customer Safeguards and Oversight Gaps

The BCC also identified lapses in customer-related compliance. These included OANDA’s failure to obtain proper security deposits from retail forex clients, errors in displaying pricing to customers, and distributing promotional materials that did not meet regulatory standards. These issues, according to the BCC, reflect systemic supervisory weaknesses.

Broader Implications for the Prop Trading Ecosystem

While OANDA operates as a regulated broker, its ownership by FTMO, a major player in the proprietary trading space, raises questions about oversight and transparency within the broader funded trading ecosystem. The NFA also mandated that OANDA compensate customers impacted by these failures, although specific restitution figures were not disclosed.

As regulation tightens around firms connected to both retail and prop trading models, this case serves as a warning: strong internal controls and regulatory compliance are critical—even for firms backed by successful prop trading brands.

Stay tuned to PropInsider for continued coverage of regulatory developments affecting the funded trading industry.

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