U.S. regulators are proposing tougher rules for foreign exchange (FX) dealers following the near failure of one major firm, and the collapse of a handful of smaller ones, earlier this year amid extreme volatility in FX markets.

The U.S. National Futures Association (NFA), a self-regulatory organization based in Chicago, submitted a series of proposed rule amendments to the Washington, D.C.-based U.S. Commodity Futures Trading Commission (CFTC) for approval on Thursday.

The changes are designed to prevent a repeat of the turmoil created among FX dealers after some of their customers suffered major trading losses, which spilled over to the firms themselves.

The trouble was sparked by a surprise decision by the Swiss National Bank (SNB) to abandon its cap on the Swiss franc’s exchange rate against the euro in January, which caused huge losses for some FX traders. In the wake of that episode, the NFA has been “exploring appropriate regulatory responses designed to minimize similar losses in the future,” it says.

As a result, the NFA has concluded that the rules for FX dealers should be tightened in a number of areas. For example, the NFA has decided that FX dealers should be subject to risk management program requirements that are similar to the requirements imposed on futures commission merchants (FCMs) and swap dealers (SDs). It is also seeking to raise firms’ capital requirements to factor in the risks associated with forex transactions between FX dealers and certain counterparties, particularly those acting as foreign dealers.

The NFA is also seeking to require FX dealers to make public disclosures similar to those required of FCMs under CFTC rules, setting out their material risks, including the risk created by affiliates that are also acting as dealers. “This disclosure is important given the fact that when the Swiss National Bank abandoned its cap on the Swiss franc’s exchange rate against the Euro, one [FX firm] suffered significant losses, which were primarily attributable to losses of its foreign U.K. affiliate,” it notes.

In addition, the NFA is seeking to require FX dealers to comply with a annual compliance report requirement similar to what’s required by the CFTC from FCMs and swaps dealers.