The National Futures Association (NFA) is the organization that is responsible for regulating the futures industry. Their primary roles include creating rules and regulations, protecting investors and monitoring registered professionals (brokers, floor traders, etc.) in the futures industry.
Registration Duties of National Futures Association
The Commodity Futures Trading Commission (CFTC) is responsible for the entire futures industry, but the main role of National Futures Association is to protect investors. This is accomplished through requiring NFA registration of any firm or individual who wishes to conduct futures-related business with the public.The National Futures Association checks the background of each individual that wishes to conduct business in the futures industry with the public. This screening process should keep out most of the unscrupulous individuals from preying on the public. Any broker or money manager who trades commodities and futures should be registered with the NFA.
Before you hand over money to a futures broker, you can check the complaint history of the brokerage firm and the individual broker or money manager. A long history of complaints on a broker may be a warning sign to look elsewhere. You can check on National Futures Association members at National Futures Association.
Futures Industry Enforcement
The National Futures Association routinely monitors registered industry professionals to make sure they are following the rules and regulations that the NFA has created. A common practice is for the NFA to audit brokerage firms around the country. These audits can alert the National Futures Association to improprieties that may be taking place with firms or individuals.Often, the NFA will step up investigations when they begin receive numerous complaints from individuals. This normally tips them off to unscrupulous individuals who are cheating the public. If their investigations lead to evidence of violations, the firms and individuals can be fined or barred from registering with the National Futures Association.
