12 CFR § 240.12 - Authorization to trade.

---
identifier: "/us/cfr/t12/s240.12"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "12 CFR § 240.12 - Authorization to trade."
title_number: 12
title_name: "Banks and Banking"
section_number: "240.12"
section_name: "Authorization to trade."
chapter_name: "FEDERAL RESERVE SYSTEM"
subchapter_number: "A"
subchapter_name: "BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM"
part_number: "240"
part_name: "RETAIL FOREIGN EXCHANGE TRANSACTIONS (REGULATION NN)"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
authority: "7 U.S.C. 2(c)(2)(E), 12 U.S.C. 248, 321-338, 1813(q), 1818, 1844(b), 3106a, 3108."
regulatory_source: "78 FR 21027, Apr. 9, 2013, unless otherwise noted."
cfr_part: "240"
---


# 240.12 Authorization to trade.

(a) *Specific authorization required.* No banking institution may directly or indirectly effect a retail forex transaction for the account of any retail forex customer unless, before the transaction occurs, the retail forex customer specifically authorized the banking institution to effect the retail forex transaction.

(b) A retail forex transaction is “specifically authorized” for purposes of this section if the retail forex customer specifies:

(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.