The board of directors of National Futures Association (NFA) have approved the ban on the usage of credit cards to fund retail forex and futures accounts.
The move by NFA comes after studying over 15,000 retail forex accounts and the business practices used by the forex dealer members.
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The study revealed that the amount was being funded by small retail customers using credit cards or borrowed funds.
NFA president and CEO Dan Roth said since their inception, NFA has been committed to protecting investors.
"Forex and futures markets are both high-risk and volatile, and individuals who wish to participate should use only risk capital to fund their accounts. Allowing customers to fund accounts with credit cards encourages them to trade with borrowed money," Roth added.
The prohibition, however, is subject to approval by the Commodity Futures Trading Commission.
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