Abstract:
After establishment of Commodity Futures Trading Commission, by the same legislation, National Futures Association was set up as a registered futures association. National Futures Association has the authority to regulate every person or firm, involved in futures trading with public.National Futures Association works in a self regulatory manner. It has got tremendous reputation for fighting against fraud and abuse in the trading of the future contracts. National Futures Association or NFA formulates its' rules and programs in such a way that it ensures market integrity. NFA protects the investors who invest in the futures industry of USA. National Futures Association is not tied to any specific commodity exchange. Programs and operations of National Futures Association are financed by the fees paid by the members and the assessment fees paid by the futures market traders.
Functions of National Futures Association
For fighting fraud and abuse in futures contracts trading, National Futures Association applies very strict rules for the registration process. There are stringent rules regarding
- risk disclosure
- disclosure of fees
- minimum capital requirements
- discretionary trading
- National Futures Association runs audit programs for their members and also conducts financial surveillance program.
- In case of violation of rules, National Futures Association issues warning letters, forms complaints and charges penalties. In many cases, NFA collaborates with Commodity Futures Trading Commission(CFTC) for ensuring successful prosecutions.
- NFA offers several publications, which provide knowledge about futures market. These publications can really help the investors in taking right investment decisions.
- National Futures Association made its' extensive database available on the Internet. Information regarding registration procedure are also available in the website.
