Who regulates off-exchange foreign currency trading?

The CFTC has some regulatory authority over retail off-exchange
forex markets. The Commodity Exchange Act (CEA) allows the
sale of OTC forex futures and options to retail customers if, and
only if, the counterparty (the person on the other side of the
transaction) is a regulated entity. These regulated entities include
the following:
1.financial institutions, such as banks and savings
associations,
2.registered broker-dealers and certain of their affiliates,
3.registered futures commission merchants (FCMs) and
certain of their affiliates,
4,certain insurance companies and their regulated affiliates
5.financial holding companies, and
6.investment bank holding companies.
Under the CEA, the CFTC has the authority to shut down any
unregulated entity that acts as a counterparty to forex futures or
options transactions with retail customers. The CFTC also has
the authority to take action against registered FCMs and their
affiliates for violating the anti-fraud and anti-manipulation pro-
visions of the CEA in connection with OTC forex transactions
involving retail customers, but the CFTC cannot adopt rules to
regulate these transactions.