The National Futures Association (NFA) is an independent, self-regulatory and non-profit organization for the U.S derivatives industry, OTC derivatives, retail off-exchange foreign currency and on-exchange trade futures. Its maintain office is in New York City, and headquarter is in Chicago. National Futures Association (NFA) is not a trade association neither it operates any markets.
Congress established the Commodity Futures Trading Commission, a central governing agency with authority over future trading in 1974. The similar lawmaking sanctioned the formation of registered futures association giving the future industry an opening to build a nationwide independent self-regulatory organization. The National Futures Association (NFA) began its operation in 1982.
In 2000 and 2008, Congress approved lawmaking requiring forex pool operators, firms acting as counterparties to retail forex transactions, brokers and trading advisors to register with the Commodity Futures Trading Commission (CFTC) to become a member of National Futures Association (NFA). Similarly in 2010, the Dodd-Frank Wall Street Reforms and Consumer Protection Act was passed by Congress to give CFTC rulemaking power over significant swap participants and swap dealers to register with the CFTC and become members of National Futures Association (NFA).
National Futures Association (NFA) is a self-regulatory and independent organization which has an authority to search and implement what it considers are paramount for the futures industry. The NFA creates rules that are mandatory for its members to follow. It has an authority to revoke the membership or impose fines to its members.
National Futures Association (NFA) membership assures investing community that all associates, firms and intermediaries who conduct business with the public on United States retail market place and future exchanges must follow the similar high standard of specialized conduct. The firms, associates and intermediaries pay membership dues to the National Futures Association (NFA), which is the way NFA gets its funds to operate.
The current number of National Futures Association (NFA) memberships are approximately 4,000 firms and about 55,000 associates. It also delivers supervisory services to nominated contract markets on a contractual basis for more than ten years. Since 2013, the National Futures Association (NFA) has offered similar services to SFE’s.