Sales Practices, Suitability, Supervision, and Prohibited Conduct
Sales practices and suitability
Forex marketing is held to a strict anti-fraud standard. A registered person may not guarantee profits, guarantee against loss, predict specific returns, or describe forex as a safe, savings-like, or "second income" vehicle. Hypothetical or simulated results must be clearly labeled and cannot be presented as actual performance. Testimonials need prominent disclaimers and may not imply typical results. Suitability requires reasonable inquiry into the customer's finances, experience, and objectives; recommendations must fit that profile, and heightened care is owed to retirees, customers of modest means, and anyone whose liquid assets are small relative to the proposed position size. The core message of the disclosure statement is that a customer should never commit funds they cannot afford to lose.
Supervision
Each dealer must adopt written supervisory procedures, designate a supervisor, approve promotional material before distribution, review new accounts and trading activity, monitor for excessive trading or unauthorized transactions, and handle and log customer complaints. An annual review of the compliance program is expected, along with training and prompt remediation of发现问题.
Prohibited conduct
Classic violations include churning, unauthorized trading, unauthorized discretion, misappropriation or commingling of customer funds, fraudulent price adjustments (adjustments are allowed only for genuine technical errors and must be applied consistently, never as asymmetric slippage in the dealer's favor), offsetting prohibited hedging, and doing business while unregistered. Failure to supervise is charged alongside the underlying misconduct.
Worked example. An associated person tells a prospect that forex "works like a savings account with 15% guaranteed annually" and opens a 50:1 position for a retiree living on Social Security. This implicates misrepresentation, an impermissible guarantee, suitability, and supervisory failures.
Traps: treating a truthfully labeled hypothetical as automatically prohibited (it is not, if disclaimed); missing that the supervisor, not just the representative, can be charged.