Governing organization NFA
NFA (National Futures Association) is the national futures Association, formed in the USA in 1982 after the CFTC (Commission on trade in commodity futures), which appeared earlier in 1974. NFA is an independent self-regulatory organization whose purpose is to protect the ethics of the futures and foreign exchange markets and protect the interests of traders and investors. Membership in NFA is mandatory, otherwise the broker will not be admitted to the futures market. Today in the registry of the National futures Association is nearly 4 thousand companies and more than 50 thousand brokers, and thanks to the online service, introduced in 2001, made possible the resolution of disputes between parties from around the world.
U.S. regulator NFA cooperates closely with the CFTC, established by the U.S. Congress, the Chicago Mercantile exchange CME Group and the FBI. For example, all executives are eligible for inclusion in the NFA registry, must submit fingerprints to check them in the FBI. Also all companies are required to report the movement of funds and transfer of assets. The money of U.S. taxpayers are not left to cover the costs and content of the regulatory agencies have been introduced fees and membership fees, which may differ from the scope of activities of market participant. So, the authorized representative of the legal person must pay $ 170 for access to the futures market, and the swap dealer category-1 (market-maker) – $ 1 million as an entrance fee and 250 thousand dollars every quarter.
The duties of the National Futures Association is to develop rules to ensure order on the futures market and control over their execution, tracking of violations, arbitration and mediation in solving disputes, as well as the application of disciplinary measures. NFA may conduct audits and financial audits, and in case of violation of market rules for trade, to adopt the following penalties:
suspension from trading for a specified period;
an exception from the SRO and the termination of access to the futures market;
a ban on Association with other members of the NFA;
a fine of up to $ 250 thousand;
the transmission of information about the offender to the FBI.
In addition, NFA bans for brokers in the Forex and futures market the use of hedging. She explains: Forex dealer member of NFA, has no right to open counter positions to compensate for their losses. NFA is also one of the first regulatory bodies, which apply to online brokers, which gave a powerful impetus to the development of online trading. To prevent signs of fraud, all brokers are required to provide NFA promotional materials before they are published and keep records of telephone conversations with their customers.
Thus, the National Futures Association is one of the most influential and reliable regulatory organizations worldwide, along with the CFTC and the FCA.