NFA: National Futures Association

America today is one of the most regulated countries in the world. Virtually every field of activity is subordinate to some governing body, which tirelessly monitors compliance with the rules of operation in order to protect the rights of Americans. The magazine has reviewed several U.S. financial regulators so far, including SEC и CFTC. This time we will look at America's futures market regulator -  NFA.

National Futures Association (NFA)

Market regulation in the U.S. by the NFA

  • Full title:  national futures association
  • Title at English: National Futures Association
  • Abbreviated title: NFA
  • Subordinate countries: U.S.
  • Funding: from license revenues
  • Degree of trust of traders: tall.
  • Official website:

This organization is a futures association organized in the United States in 1982, when it was necessary to reduce the sphere of influence of the Commission to Regulate the Markets in Goods and futures (CFTC). After many years, the reputation NFA has grown so much that it is considered one of the most important regulatory structures in the world. The purpose of the association was to protect the rights of all participants in the futures market, as well as protection against fraud. Today, the NFA is a self-regulatory industry association dedicated to supporting the stable operation of the futures industry, including developing rules for trading, protecting the rights of investors, training and supporting them, monitoring market participants, monitoring and suppressing fraud.

Obtaining an NFA license - becoming a full-fledged reliable brokerThat is why many financial companies are trying to get its attesting document, but not everyone is able to do it. All brokers with the NFA license are obliged not only to observe the rules of work at the exchanges, prescribed by its regulations, but also to correspond to the legislative norms. The special merit of this regulator is the mechanism of struggle against fraudulent broker structures. And this is achieved in few steps:

  • thorough screening of all companiesThe following are some of the most important factors in the process of licensing, from the origins of their financial base to full auditing, that are involved in the trading of paper assets, including futures;
  • the possibility of limiting the rights of the brokerage firm in the country's financial markets when violations or inconsistencies with the legal framework are identified;
  • full monitoring of advertising activities of dealing centers in order to identify any inconsistency between the information presented therein and the true financial policy;
  • application of penalties to unscrupulous brokers in amounts not exceeding $250,000, suspension of the license right, or revocation of the license right altogether;
  • close cooperation with the FBI and other controlling structures of the U.S. government.

Pretty an important point comes down to innovationthat have been introduced NFA:

  • Creation of the rule "About Telemarketing". It requires each broker to create a television advertisement and, before broadcasting it, make it available for preview in the NFA. This rule has been in effect since '93;
  • The regulator we are considering was the first to spread Internet broker licensesThe first such operation dates back to 2001; the first was in 2001. The first such operation dates back to 2001;
  • to ensure the transparency of bidding NFA distributed in 2008 to controlled brokers a rule prohibiting the locking of positions. This means that the intermediary cannot open counter-type orders to reduce the loss - an analogy to the practice of FIFO (accounting): first open - first and closed.

Few brokers providing financial services in the CIS countries are licensed NFA. And that's why traders' confidence in those companies that have it is especially high. And this is justified, because the rules of the regulator suggest that it can be confident in each firm to which it gives a license.

Other Exchange Regulators

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