National Futures Association (NFA) is an industry-wide self-regulatory organization for the U.S. derivatives industry, including exchange-traded futures, retail over-the-counter foreign currency (forex), and over-the-counter derivatives (swaps). Expect).
Designated as a Registered Futures Association by the Commodity Futures Trading Commission (CFTC), NFA works every day to uphold the integrity of derivatives markets, protect investors and ensure members meet their regulatory responsibilities.
NFA members include swap dealers (SD), futures commission merchants (FCM), commodity pool operators (CPO), commodity trading advisors (CTA), retail foreign exchange dealers (RFED), and introducing brokers (IB) And the (AP) of relevant personnel FCM, CPO, CTA and IB
It aims to maintain investor confidence by developing rules, programs and services that maintain market integrity. It also helps resolve consumer complaints.
What does NFA do?
Registration Screening
NFA thoroughly screens applicants for CFTC registration and NFA membership to ensure they meet strict health and proficiency requirements.
NFA reserves the right to refuse, revoke, suspend or restrict the registration of any company or individual. The CFTC has delegated registration responsibilities to the NFA.
Compliance Rules
NFA adopts and enforces rules covering the business conduct of its members, including sales practices, recordkeeping, reporting, risk disclosures, discretionary trading, expense disclosures and minimum capital requirements.
NFA monitors its members’ compliance with its rules by conducting risk-based inspections, reviewing member filings, conducting financial oversight and investigating customer complaints
Rule Enforcement
NFA takes disciplinary action against members who violate NFA rules, and
CFTC regulations.
These actions range from warning letters for minor violations to formal complaints.
Penalties resulting from complaints include expulsion, suspension, and fines of up to $250,000 per violation.
NFA frequently cooperates with the CFTC, FBI and other law enforcement agencies
agencies to ensure full and comprehensive prosecution
Member Education
NFA provides educational resources including webinars, workshops, and
Reference material to ensure members understand their regulatory obligations.
Market Regulation
NFA provides regulatory services for Designated Contract Markets (DCMs) and
Swap execution facilities (SEFs), each with self-regulatory responsibilities to monitor trades on their platform.
Investor Protection
NFA offers numerous resources to educate investors. Before participating in the derivatives market, investors should understand how the market works and conduct background checks on the companies and individuals offering investments.
History of NFA
1974, Congress created the Commodity Futures Trading Commission (CFTC).
The same legislation that established the CFTC also authorized the creation of registered futures associations, providing the industry with the opportunity to create self-regulatory organizations.
NFA received official designation from the CFTC as a “Registered Futures Association” on September 22, 1981.
NFA began regulatory operations on 1982.
NFA Board of Directors
NFA’s Board of Directors is its primary governing and policy-making body.
The Board of Directors is composed of member directors and public directors. The NFA Board of Directors is structured to ensure representation from each membership category.
Member Directors are elected through an election process by the members they represent.
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