National Futures Association NFA
Definition of 'National Futures Association NFA'
The NFA is the industry wide, self-regulatory organization for the U.S. futures industry. They develop rules, programs and services that safeguard market integrity, protect investors and help Members meet their regulatory responsibilities.
Membership in NFA is mandatory, assuring that everyone conducting business with the public on the U.S. futures exchanges-more than 4,200 firms and 55,000 associates-must adhere to the same high standards of professional conduct.
The NFA is an independent regulatory organization with no ties to any specific marketplace. They operate at no cost to the taxpayer and are financed exclusively from membership dues and from assessment fees paid by the users of the futures markets.
The NFA's role in the U.S. futures industry
In 1974 Congress established the Commodity Futures Trading Commission (CFTC), a federal regulatory agency with jurisdiction over futures trading. The same legislation authorized the creation of "registered futures associations," giving the futures industry the opportunity to create a nationwide self-regulatory organization.
The CFTC provides government oversight for the entire industry. Each U.S. futures exchange operates as a self-regulatory organization, governing its floor brokers, traders and member firms. NFA regulates every firm or individual who conducts futures trading business with public customers. Although the various regulatory organizations in the futures industry have their own specific areas of authority, together they form a regulatory partnership that oversees all industry participants.
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