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NFA National Futures Association

National Futures Association (NFA) was set in 1976 as self-regulatory body intended to protect rights of participants of the USA financial market. The association was created in the form on non-profit self-regulatory organization and by the moment it controls two large industries: futures trading and Forex. Each company - a professional participant of financial market - must be registered in CFTC and be a member of the National Futures Association. By the moment, NFA numbers more than 5000 of associated members.

Within the framework of regulations, NFA primarily implements the function of control over proper compliance of organization members with the Federal laws as well as standards set CFTC. To cope with fraud and various abuse against stock and Forex brokers, NFA takes a number of measures first of all including supervision over implementation of clear-cut rules regarding advertising, public notification about risk, satisfying requirements to capital of company and competence of employees.

Speaking about specific measures, we can distinguish the following:

  1. Application of financial and organizational sanctions against brokers including large penalties, recall of license, suspension of activity on the territory of the USA;
  2. Careful examination of organizations including finance audit and analysis of accuracy of trading procedure's implementation;
  3. Denial or limitations of activities of new companies that do not meet regulation standards of the body;
  4. Cooperation with law enforcement bodies and other state agencies.

Crucial role of NFA is to settle disputes and conflicts between trader and broker. Arbitrage management program started its activity in 1983 and represents an efficient method of dealing with disputes between traders, investors and brokers. Association became the first world regulating body accepting arbitrage claims via the Internet. Apart from that, common official hearings are conducted providing parties with the opportunity to turn to barrister's services.

 

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