National Futures Association - Regulation Agency

    Overview of National Futures Association

    The National Futures Association (NFA) is responsible for regulating and monitoring all futures activity within the United States of America and began operating in 1982.  The NFAs main responsibility is to register trading professionals (introducing brokers and commodity tradin

    Overview of National Futures Association

    The National Futures Association (NFA) is responsible for regulating and monitoring all futures activity within the United States of America and began operating in 1982.  The NFAs main responsibility is to register trading professionals (introducing brokers and commodity trading advisors). 

    Role of the National Futures Association

    The NFA's main responsibility is to protect investors in the futures industry and the organization accomplishes this by sending a commodity trading advisor through a vetting process.  This process includes a background check, fingerprinting, and extensive paperwork.  Once a trader is registered the NFA is responsible for monitoring the activities of the trader.  This monitoring includes random audits and tracking of complaints from clients.   While the National Futures Association is an independent agency, it does assist in mediation services between brokerage firms and investors.

    Enforcement of Regulations

    The NFA has the authority to enforce its regulations against violators of the rules and regulations.  The NFA works directly with the U.S. Commodities Futures Trading Commission (CTFC) and the FBI to prosecute perpetrators.  Fines can include jail and penalties of up to $250,000.

    National Futures Assocation Board of Directors

    NFAs Board of directors is the governing body of the NFA.  It is comprised of 25 executives and the directors are elected by the members in their respective registration categories.  The executive board elects officers and makes committee appointments at the annual meeting.   Each director serves a staggered three-year term. 

    NFA and the CTFC

    The NFA is an arm of the CTFC, but over the years, the regulatory responsibilities of the NFA has continued to expand.  NFA now processes all futures industry participants, initiates and or revokes registrations, and reviews all CTA disclosure documents.  With the advent of technology, the registration process is streamlined and the NFA sends an approved registrants file directly to the CTFC electronically.

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