PART 48—RETAIL FOREIGN EXCHANGE TRANSACTIONS Authority: 7 U.S.C. 27 et seq.; et seq., et seq., et seq., Source: 76 FR 41384, July 14, 2011, unless otherwise noted. § 48.1 Authority, purpose, and scope. (a) Authority National banks. (2) Federal savings associations. (b) Purpose. (c) Scope. (d) International applicability. [76 FR 41384, July 14, 2011, as amended at 76 FR 56096, Sept. 12, 2011] § 48.2 Definitions. In addition to the definitions in this section, for purposes of this part, the following terms have the same meaning as in the Commodity Exchange Act: “Affiliated person of a futures commission merchant”; “associated person”; “contract of sale”; “commodity”; “eligible contract participant”; “futures commission merchant”; “future delivery”; “option”; “security”; and “security futures product”. Affiliate Commodity Exchange Act et seq. Federal savings association Forex Identified banking product Institution-affiliated party IAP Introducing broker National bank (1) A national bank; (2) A Federal branch or agency of a foreign bank, each as defined in 12 U.S.C. 3101; and (3) An operating subsidiary of a national bank or an operating subsidiary of a Federal branch or agency of a foreign bank. Related person, (1) Any general partner, officer, director, or owner of 10 percent or more of the capital stock of the retail forex counterparty; (2) An associated person or employee of the retail forex counterparty, if the retail forex counterparty is not a national bank; (3) An IAP of the retail forex counterparty, if the retail forex counterparty is a national bank; and (4) A relative or spouse of any of the foregoing persons, or a relative of such spouse, who shares the same home as any of the foregoing persons. Retail foreign exchange dealer Retail forex account Retail forex account agreement Retail forex business Retail forex counterparty (1) A national bank; (2) A retail foreign exchange dealer; (3) A futures commission merchant; and (4) An affiliated person of a futures commission merchant. Retail forex customer Retail forex obligation Retail forex proprietary account (1) The national bank; (2) An officer, director, or owner of 10 percent or more of the capital stock of the national bank; or (3) An employee of the national bank, whose duties include: (i) The management of the national bank's business; (ii) The handling of the national bank's retail forex transactions; (iii) The keeping of records, including without limitation the software used to make or maintain those records, pertaining to the national bank's retail forex transactions; or (iv) The signing or co-signing of checks or drafts on behalf of the national bank; (4) A spouse or minor dependent living in the same household as any of the foregoing persons; or (5) An affiliate of the national bank. Retail forex transaction (1) A contract of sale of a commodity for future delivery or an option on such a contract; (2) An option, other than an option executed or traded on a national securities exchange registered pursuant to section 6(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78(f)(a)); or (3) Offered or entered into on a leveraged or margined basis, or financed by a national bank, its affiliate, or any person acting in concert with the national bank or its affiliate on a similar basis, other than: (i) A security that is not a security futures product as defined in section 1a(47) of the Commodity Exchange Act (7 U.S.C. 1a(47)); or (ii) A contract of sale that: (A) Results in actual delivery within two days; or (B) Creates an enforceable obligation to deliver between a seller and buyer that have the ability to deliver and accept delivery, respectively, in connection with their line of business; or (iii) An agreement, contract, or transaction that the OCC determines is not functionally or economically similar to: (A) A contract of sale of a commodity for future delivery or an option on such a contract; or (B) An option, other than an option executed or traded on a national securities exchange registered pursuant to section 6(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78(f)(a)). [76 FR 41384, July 14, 2011, as amended at 76 FR 56096, Sept. 12, 2011] § 48.3 Prohibited transactions. (a) Fraudulent conduct prohibited. (1) Cheat or defraud or attempt to cheat or defraud any person; (2) Willfully make or cause to be made to any person any false report or statement or cause to be entered for any person any false record; or (3) Willfully deceive or attempt to deceive any person by any means whatsoever. (b) Acting as counterparty and exercising discretion prohibited. § 48.4 Supervisory non-objection. (a) Supervisory non-objection required. (b) Requirements for obtaining supervisory non-objection. (i) Establish to the satisfaction of the OCC that the national bank has established and implemented written policies, procedures, and risk measurement and management systems and controls for the purpose of ensuring that it conducts retail forex transactions in a safe and sound manner and in compliance with this part; and (ii) Provide such other information as the OCC may require. (2) The information provided under paragraph (b)(1) of this section must include, without limitation, information regarding: (i) Customer due diligence, including without limitation credit evaluations, customer appropriateness, and “know your customer” documentation; (ii) New product approvals; (iii) The haircuts that the national bank will apply to noncash margin as provided in § 48.9(b)(2); and (iv) Conflicts of interest. (c) Treatment of existing retail forex businesses. (d) Compliance with the Commodity Exchange Act. [76 FR 41384, July 14, 2011, as amended at 76 FR 56096, Sept. 12, 2011] § 48.5 Application and closing out of offsetting long and short positions. (a) Application of purchases and sales. (1) Engages in a retail forex transaction involving the purchase of any currency for the account of any retail forex customer when the account of such retail forex customer at the time of such purchase has an open retail forex transaction for the sale of the same currency; (2) Engages in a retail forex transaction involving the sale of any currency for the account of any retail forex customer when the account of such retail forex customer at the time of such sale has an open retail forex transaction for the purchase of the same currency; (3) Purchases a put or call option involving foreign currency for the account of any retail forex customer when the account of such retail forex customer at the time of such purchase has a short put or call option position with the same underlying currency, strike price, and expiration date as that purchased; or (4) Sells a put or call option involving foreign currency for the account of any retail forex customer when the account of such retail forex customer at the time of such sale has a long put or call option position with the same underlying currency, strike price, and expiration date as that sold must: (i) Immediately apply such purchase or sale against such previously held opposite transaction; and (ii) Promptly furnish such retail forex customer with a statement showing the financial result of the transactions involved and the name of any introducing broker to the account. (b) Close-out against oldest open position. (c) Transactions to be applied as directed by customer. § 48.6 Disclosure. (a) Risk disclosure statement required. (b) Acknowledgment of risk disclosure statement required. (c) Placement of risk disclosure statement. (d) Content of risk disclosure statement. Risk Disclosure Statement Retail forex transactions involve the leveraged trading of contracts denominated in foreign currency with [name of entity] as your counterparty. Because of the leverage and the other risks disclosed here, you can rapidly lose all of the funds or property you pledge to [name of entity] as margin for retail forex trading. You may lose more than you pledge as margin. If your margin falls below the required amount, and you fail to provide the required additional margin, [name of entity] is required to liquidate your retail forex transactions. [Name of entity] cannot apply your retail forex losses to any of your assets or liabilities at [name of entity] other than funds or property that you have pledged as margin for retail forex transactions. However, if you lose more money than you have pledged as margin, [name of entity] may seek to recover that deficiency in an appropriate forum, such as a court of law. You should be aware of and carefully consider the following points before determining whether retail forex trading is appropriate for you. (1) Trading is not on a regulated market or exchange—[name of entity] is your trading counterparty and has conflicting interests. The retail forex transaction you are entering into is not conducted on an interbank market nor is it conducted on a futures exchange subject to regulation as a designated contract market by the Commodity Futures Trading Commission. The foreign currency trades you transact are trades with [name of entity] as the counterparty. When you sell, [name of entity] is the buyer. When you buy, [name of entity] is the seller. As a result, when you lose money trading, [name of entity] is making money on such trades, in addition to any fees, commissions, or spreads [name of entity] may charge. (2) An electronic trading platform for retail foreign currency transactions is not an exchange. It is an electronic connection for accessing [name of entity]. The terms of availability of such a platform are governed only by your contract with [name of entity]. Any trading platform that you may use to enter into off-exchange foreign currency transactions is only connected to [name of entity]. You are accessing that trading platform only to transact with [name of entity]. You are not trading with any other entities or customers of [name of entity] by accessing such platform. The availability and operation of any such platform, including the consequences of the unavailability of the trading platform for any reason, is governed only by the terms of your account agreement with [name of entity]. (3) You may be able to offset or liquidate any trading positions only through [name of national bank] because the transactions are not made on an exchange or regulated contract market, and [name of entity] may set its own prices. Your ability to close your transactions or offset positions is limited to what [name of entity] will offer to you, as there is no other market for these transactions. [Name of entity] may offer any prices it wishes, including prices derived from outside sources or not in its discretion. [Name of entity] may establish its prices by offering spreads from third-party prices, but it is under no obligation to do so or to continue to do so. [Name of entity] may offer different prices to different customers at any point in time on its own terms. The terms of your account agreement alone govern the obligations [name of entity] has to you to offer prices and offer offset or liquidating transactions in your account and make any payments to you. The prices offered by [name of entity] may or may not reflect prices available elsewhere at any exchange, interbank, or other market for foreign currency. (4) Paid solicitors may have undisclosed conflicts. [Name of entity] may compensate introducing brokers for introducing your account in ways that are not disclosed to you. Such paid solicitors are not required to have, and may not have, any special expertise in trading and may have conflicts of interest based on the method by which they are compensated. You should thoroughly investigate the manner in which all such solicitors are compensated and be very cautious in granting any person or entity authority to trade on your behalf. You should always consider obtaining dated written confirmation of any information you are relying on from [name of entity] in making any trading or account decisions. (5) Retail forex transactions are not insured by the Federal Deposit Insurance Corporation. (6) Retail forex transactions are not a deposit in, or guaranteed by, [name of entity]. (7) Retail forex transactions are subject to investment risks, including possible loss of all amounts invested. Finally, you should thoroughly investigate any statements by [name of entity] that minimize the importance of, or contradict, any of the terms of this risk disclosure. These statements may indicate sales fraud. This brief statement cannot, of course, disclose all the risks and other aspects of trading off-exchange foreign currency with [name of entity]. I hereby acknowledge that I have received and understood this risk disclosure statement. Date Signature of Customer (e)(1) Disclosure of profitable accounts ratio. (i) The total number of retail forex customer accounts maintained by the national bank over which the national bank does not exercise investment discretion; (ii) The percentage of such accounts that were profitable for retail forex customer accounts during the quarter; and (iii) The percentage of such accounts that were not profitable for retail forex customer accounts during the quarter. (2) The national bank's statement of profitable trades must include the following legend: “Past performance is not necessarily indicative of future results.” Each national bank must provide, upon request, to any retail forex customer or prospective retail forex customer the total number of retail forex accounts maintained by the national bank for which the national bank does not exercise investment discretion, the percentage of such accounts that were profitable, and the percentage of such accounts that were not profitable for each calendar quarter during the most recent five-year period during which the national bank maintained such accounts. (f) Disclosure of fees and other charges. (1) The amount of any fee, charge, spread, or commission that the national bank may impose on the retail forex customer in connection with a retail forex account or retail forex transaction; (2) An explanation of how the national bank will determine the amount of such fees, charges, spreads, or commissions; and (3) The circumstances under which the national bank may impose such fees, charges, spreads, or commissions. (g) Future disclosure requirements. (h) Form of disclosure requirements. (i) Other disclosure requirements unaffected. [76 FR 41384, July 14, 2011, as amended at 76 FR 56096, Sept. 12, 2011] § 48.7 Recordkeeping. (a) General rule. (1) Retail forex account records. (i) The name and address of the person for whom the account is carried or introduced and the principal occupation or business of the person; (ii) The name of any other person guaranteeing the account or exercising trading control with respect to the account; (iii) The establishment or termination of the account; (iv) A means to identify the person that has solicited and is responsible for the account; (v) The funds in the account, net of any commissions and fees; (vi) The account's net profits and losses on open trades; (vii) The funds in the account plus or minus the net profits and losses on open trades, adjusted for the net option value in the case of open options positions; (viii) Financial ledger records that show all charges against and credits to the account, including deposits, withdrawals, and transfers, and charges or credits resulting from losses or gains on closed transactions; and (ix) A list of all retail forex transactions executed for the account, with the details specified in paragraph (a)(2) of this section. (2) Retail forex transaction records. (i) The date and time the national bank received the order; (ii) The price at which the national bank placed the order, or, in the case of an option, the premium that the retail forex customer paid; (iii) The customer account identification information; (iv) The currency pair; (v) The size or quantity of the order; (vi) Whether the order was a buy or sell order; (vii) The type of order, if the order was not a market order; (viii) The size and price at which the order is executed, or in the case of an option, the amount of the premium paid for each option purchased, or the amount credited for each option sold; (ix) For options, whether the option is a put or call, expiration date, quantity, underlying contract for future delivery or underlying physical, strike price, and details of the purchase price of the option, including premium, mark-up, commission, and fees; and (x) For futures, the delivery date; and (xi) If the order was made on a trading platform: (A) The price quoted on the trading platform when the order was placed, or, in the case of an option, the premium quoted; (B) The date and time the order was transmitted to the trading platform; and (C) The date and time the order was executed. (3) Price changes on a trading platform. (4) Methods or algorithms. (5) Daily records (i) All retail forex transactions that are futures transactions executed on that day, including the date, price, quantity, market, currency pair, delivery date, and the person for whom such transaction was made; (ii) All retail forex transactions that are option transactions executed on that day, including the date, whether the transaction involved a put or call, the expiration date, quantity, currency pair, delivery date, strike price, details of the purchase price of the option, including premium, mark-up, commission and fees, and the person for whom the transaction was made; and (iii) All other retail forex transactions executed on that day for such account, including the date, price, quantity, currency and the person for whom such transaction was made. (6) Other records. (b) Ratio of profitable accounts. (i) A calculation of the percentage of such accounts that were profitable; (ii) A calculation of the percentage of such accounts that were not profitable; and (iii) Data supporting the calculations described in paragraphs (b)(1)(i) and (ii) of this section. (2) In calculating whether a retail forex account was profitable or not profitable during the quarter, the national bank must compute the realized and unrealized gains or losses on all retail forex transactions carried in the retail forex account at any time during the quarter, subtract all fees, commissions, and any other charges posted to the retail forex account during the quarter, and add any interest income and other income or rebates credited to the retail forex account during the quarter. All deposits and withdrawals of funds made by the retail forex customer during the quarter must be excluded from the computation of whether the retail forex account was profitable or not profitable during the quarter. Computations that result in a zero or negative number must be considered a retail forex account that was not profitable. Computations that result in a positive number must be considered a retail forex account that was profitable. (3) A retail forex account must be considered “active” for purposes of paragraph (b)(1) of this section if and only if for the relevant calendar quarter a retail forex transaction was executed in that account or the retail forex account contained an open position resulting from a retail forex transaction. (c) Records related to violations of law. (d) Records for noncash margin. (1) A description of the securities or property received; (2) The name and address of such retail forex customer; (3) The dates when the securities or property were received; (4) The identity of the depositories or other places where such securities or property are segregated or held, if applicable; (5) The dates in which the national bank placed or removed such securities or property into or from such depositories; and (6) The dates of return of such securities or property to such retail forex customer, or other disposition thereof, together with the facts and circumstances of such other disposition. (e) Order Tickets. (i) Account identification (account or customer name with which the retail forex transaction was effected); (ii) Order number; (iii) Type of order (market order, limit order, or subject to special instructions); (iv) Date and time, to the nearest minute, that the retail forex transaction order was received (as evidenced by time-stamp or other timing device); (v) Time, to the nearest minute, that the retail forex transaction order was executed; and (vi) Price at which the retail forex transaction was executed. (2) Post-execution allocation of bunched orders. (i) The national bank placing and directing the allocation of an order eligible for post-execution allocation has been granted written investment discretion with regard to participating customer accounts and makes the following information available to retail forex customers upon request: (A) The general nature of the post-execution allocation methodology the national bank will use; (B) Whether the national bank has any interest in accounts that may be included with customer accounts in bunched orders eligible for post-execution allocation; and (C) Summary or composite data sufficient for that customer to compare the customer's results with those of other comparable customers and, if applicable, any account in which the national bank has an interest. (ii) Post-execution allocations are made as soon as practicable after the entire transaction is executed; (iii) Post-execution allocations are fair and equitable, with no account or group of accounts receiving consistently favorable or unfavorable treatment; and (iv) The post-execution allocation methodology is sufficiently objective and specific to permit the OCC to verify the fairness of the allocations using that methodology. (f) Record of monthly statements and confirmations. (g) Form of record and manner of maintenance. (h) Length of maintenance. § 48.8 Capital requirements. A national bank offering or entering into retail forex transactions must be well capitalized as defined by 12 CFR part 6. § 48.9 Margin requirements. (a) Margin required. (1) Two percent of the notional value of the retail forex transaction for major currency pairs and 5 percent of the notional value of the retail forex transaction for all other currency pairs; (2) For short options, 2 percent for major currency pairs and 5 percent for all other currency pairs of the notional value of the retail forex transaction, plus the premium received by the retail forex customer; or (3) For long options, the full premium charged and received by the national bank. (b)(1) Form of margin. (i) Obligations of the United States and obligations fully guaranteed as to principal and interest by the United States; (ii) General obligations of any State or of any political subdivision thereof; (iii) General obligations issued or guaranteed by any enterprise, as defined in 12 U.S.C. 4502(10); (iv) Certificates of deposit issued by an insured depository institution, as defined in section 3(c)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)(2)); (v) Commercial paper; (vi) Corporate notes or bonds; (vii) General obligations of a sovereign nation; (viii) Interests in money market mutual funds; and (ix) Such other financial instruments as the OCC deems appropriate. (2) Haircuts. (i) Haircuts for noncash margin collected under this section; and (ii) Annual evaluation, and, if appropriate, modification, of the haircuts. (c) Separate margin account. (d) Margin calls; liquidation of position. (i) Mark the value of the retail forex customer's open retail forex positions to market; (ii) Mark the value of the margin collected under this section from the retail forex customer to market; and (iii) Determine whether, based on the marks in paragraphs (d)(1)(i) and (ii) of this section, the national bank has collected margin from the retail forex customer sufficient to satisfy the requirements of this section. (2) If, pursuant to paragraph (d)(1)(iii) of this section, the national bank determines that it has not collected margin from the retail forex customer sufficient to satisfy the requirements of this section then, within a reasonable period of time, the national bank must either: (i) Collect margin from the retail forex customer sufficient to satisfy the requirements of this section; or (ii) Liquidate the retail forex customer's retail forex transactions. (e) Set-off prohibited. (1) Apply a retail forex customer's retail forex obligations against any funds or other asset of the retail forex customer other than margin in the separate margin account described in paragraph (c) of this section; (2) Apply a retail forex customer's retail forex obligations to increase the amount owed by the retail forex customer to the national bank under any loan; or (3) Collect the margin required under this section by use of any right of set-off. § 48.10 Required reporting to customers. (a) Monthly statements. (1) For each retail forex customer: (i) The open retail forex transactions with prices at which acquired; (ii) The net unrealized profits or losses in all open retail forex transactions marked to the market; (iii) Any money, securities, or other property in the separate margin account required by § 48.9(c); and (iv) A detailed accounting of all financial charges and credits to the retail forex customer's retail forex accounts during the monthly reporting period, including: Money, securities, or property received from or disbursed to such customer; realized profits and losses; and fees, charges, spreads, and commissions. (2) For each retail forex customer engaging in retail forex transactions that are options: (i) All such options purchased, sold, exercised, or expired during the monthly reporting period, identified by underlying retail forex transaction or underlying currency, strike price, transaction date, and expiration date; (ii) The open option positions carried for such customer and arising as of the end of the monthly reporting period, identified by underlying retail forex transaction or underlying currency, strike price, transaction date, and expiration date; (iii) All such option positions marked to the market and the amount each position is in the money, if any; (iv) Any money, securities, or other property in the separate margin account required by § 48.9(c); and (v) A detailed accounting of all financial charges and credits to the retail forex customer's retail forex accounts during the monthly reporting period, including: Money, securities, or property received from or disbursed to such customer; realized profits and losses; premiums and mark-ups; and fees, charges, and commissions. (b) Confirmation statement. (1) To each retail forex customer, a written confirmation of each retail forex transaction caused to be executed by it for the customer, including offsetting transactions executed during the same business day and the rollover of an open retail forex transaction to the next business day; (2) To each retail forex customer engaging in forex option transactions, a written confirmation of each forex option transaction, containing at least the following information: (i) The retail forex customer's account identification number; (ii) A separate listing of the actual amount of the premium, as well as each markup thereon, if applicable, and all other commissions, costs, fees, and other charges incurred in connection with the forex option transaction; (iii) The strike price; (iv) The underlying retail forex transaction or underlying currency; (v) The final exercise date of the forex option purchased or sold; and (vi) The date that the forex option transaction was executed. (3) To each retail forex customer engaging in forex option transactions, upon the expiration or exercise of any option, a written confirmation statement thereof, which statement must include the date of such occurrence, a description of the option involved, and, in the case of exercise, the details of the retail forex or physical currency position that resulted therefrom including, if applicable, the final trading date of the retail forex transaction underlying the option. (c) Notwithstanding paragraph (b) of this section, a retail forex transaction that is caused to be executed for a pooled investment vehicle that engages in retail forex transactions need be confirmed only to the operator of such pooled investment vehicle. (d) Controlled accounts. (e) Introduced accounts. § 48.11 Unlawful representations. (a) No implication or representation of limiting losses. (1) Guarantee such person or account against loss; (2) Limit the loss of such person or account; or (3) Not call for or attempt to collect margin as established for retail forex customers. (b) No implication of representation of engaging in prohibited acts. (c) No Federal government endorsement. (d) Assuming or sharing of liability from bank error. (e) Certain guaranties unaffected. § 48.12 Authorization to trade. (a) Specific authorization required. (b) Requirements for specific authorization. (1) The precise retail forex transaction to be effected; (2) The exact amount of the foreign currency to be purchased or sold; and (3) In the case of an option, the identity of the foreign currency or contract that underlies the option. § 48.13 Trading and operational standards. (a) Internal rules, procedures, and controls required. (1) Ensure, to the extent reasonable, that each retail forex transaction that is executable at or near the price that the national bank has quoted to the retail forex customer is entered for execution before any retail forex transaction for: (i) A proprietary account; (ii) An account for which a related person may originate orders without the prior specific consent of the account owner, if the related person has gained knowledge of the retail forex customer's order prior to the transmission of an order for a proprietary account; (iii) An account in which a related person has an interest, if the related person has gained knowledge of the retail forex customer's order prior to the transmission of an order for a proprietary account; or (iv) An account in which a related person may originate orders without the prior specific consent of the account owner, if the related person has gained knowledge of the retail forex customer's order prior to the transmission of an order for a proprietary account; (2) Prevent national-bank related persons from placing orders, directly or indirectly, with another person in a manner designed to circumvent the provisions of paragraph (a)(1) of this section; and (3) Fairly and objectively establish settlement prices for retail forex transactions. (b) Disclosure of retail forex transactions. (c) Handling of retail forex accounts of related persons of retail forex counterparties. (1) Receives written authorization from a person designated by the other retail forex counterparty with responsibility for the surveillance over the account pursuant to paragraph (a)(2) of this section; (2) Prepares immediately upon receipt of an order for the account a written record of the order, including the account identification and order number, and records thereon to the nearest minute, by time-stamp or other timing device, the date and time the order was received; and (3) Transmits on a regular basis to the other retail forex counterparty copies of all statements for the account and of all written records prepared upon the receipt of orders for the account pursuant to paragraph (c)(2) of this section. (d) Related person of national bank establishing account at another retail forex counterparty. (1) Receives written authorization to open and maintain the account from a person designated by the national bank with responsibility for the surveillance over the account pursuant to paragraph (a)(2) of this section; and (2) Transmits on a regular basis to the national bank copies of all statements for the account and of all written records prepared by the other retail forex counterparty upon receipt of orders for the account pursuant to paragraph (a)(2) of this section. (e) Prohibited trading practices. (1) Enter into a retail forex transaction, to be executed pursuant to a market or limit order at a price that is not at or near the price at which other retail forex customers, during that same time period, have executed retail forex transactions with the national bank; (2) Adjust or alter prices for a retail forex transaction after the transaction has been confirmed to the retail forex customer; (3) Provide to a retail forex customer a new bid price for a retail forex transaction that is higher than its previous bid without providing a new asked price that is also higher than its previous asked price by a similar amount; (4) Provide to a retail forex customer a new bid price for a retail forex transaction that is lower than its previous bid without providing a new asked price that is also lower than its previous asked price by a similar amount; or (5) Establish a new position for a retail forex customer (except one that offsets an existing position for that retail forex customer) where the national bank holds outstanding orders of other retail forex customers for the same currency pair at a comparable price. § 48.14 Supervision. (a) Supervision by the national bank. (b) Supervision by officers, employees, or agents. § 48.15 Notice of transfers. (a) Prior notice generally required. (b) Exceptions. (1) Requested by the retail forex customer; (2) Made by the Federal Deposit Insurance Corporation as receiver or conservator under the Federal Deposit Insurance Act; or (3) Otherwise authorized by applicable law. (c) Obligations of transferee national bank. § 48.16 Customer dispute resolution. (a) Voluntary submission of claims to dispute or settlement procedures. (1) Signing the agreement is not a condition for the customer to use the services offered by the national bank. (2) If the agreement is contained as a clause or clauses of a broader agreement, the customer separately endorses the clause or clauses. (3) The agreement advises the retail forex customer that, at such time as the customer notifies the national bank that the customer intends to submit a claim to arbitration, or at such time the national bank notifies the customer of its intent to submit a claim to arbitration, the customer will have the opportunity to choose a person qualified in dispute resolution to conduct the proceeding. (4) The agreement must acknowledge that the national bank will pay any incremental fees that may be assessed in connection with the dispute resolution, unless it is determined in the proceeding that the retail forex customer has acted in bad faith in initiating the proceeding. (5) The agreement must include the following language printed in large boldface type: Two forums exist for the resolution of disputes related to retail forex transactions: civil court litigation and arbitration conducted by a private organization. The opportunity to settle disputes by arbitration may in some cases provide benefits to customers, including the ability to obtain an expeditious and final resolution of disputes without incurring substantial cost. Each customer must individually examine the relative merits of arbitration and consent to this arbitration agreement must be voluntary. By signing this agreement, you: (1) May be waving your right to sue in a court of law; and (2) are agreeing to be bound by arbitration of any claims or counterclaims that you or [name of entity] may submit to arbitration under this agreement. In the event a dispute arises, you will be notified if [name of entity] intends to submit the dispute to arbitration. You need not sign this agreement to open or maintain a retail forex account with [name of entity]. (b) Election of forum. (2) The customer must, within 45 days after receipt of such list, notify the national bank of the person selected. The customer's failure to provide such notice must give the national bank the right to select a person from the list. (c) Enforceability. (d) Time limits for submission of claims. (e) Counterclaims. (1) Arises out of the transaction or occurrence that is the subject of the retail forex customer's claim or grievance; and (2) Does not require for adjudication the presence of essential witnesses, parties, or third persons over which the settlement process lacks jurisdiction. [76 FR 41384, July 14, 2011, as amended at 76 FR 56097, Sept. 12, 2011] § 48.17 Reservation of authority. The OCC may modify the disclosure, recordkeeping, capital and margin, reporting, business conduct, documentation, or other standards or requirements under this part for a specific retail forex transaction or a class of retail forex transactions if the OCC determines that the modification is consistent with safety and soundness and the protection of retail forex customers.