Nobody can give you a guarantee that you will make money trading commodities, but it is nice to know that you are trading on very regulated markets and there are many rules in place to protect investors from wrongdoing.
The National Futures Association (NFA) is the self-regulatory organization for the futures industry in the U.S. Their main goals are to ensure the integrity of the markets and protect investors. Although some investors in the futures markets do fall victim to fraud or misconduct, it could be much worse if the NFA did not have such a vast number of rules and regulations in place.
Registration
The NFA requires all firms and individuals to be registered to do business with the public on any U.S. futures exchange. Applicants must undergo background checks, which include providing fingerprint cards. Individuals must also pass proficiency exams that test on market knowledge, rules and regulations. It is unlikely that any career criminals will get licensed as a commodity broker.You can call or visit their website to check any registered individual or firm for registration details, prior complaints and employment history in the industry.
Disputes
There will obviously be some complaints due to the enormous number of trades that take place and the amount of money invested in the futures markets every day. You can contact the NFA if you believe that you have a legitimate complaint with your commodity broker or anyone else in the industry.Complaints generally arise from investors who feel their broker improperly managed their account. The broker may have made unauthorized trades or did not fully disclose the risk involved in trading futures. As you might guess, virtually all the complaints have one thing in common – somebody lost money.
If you do have a complaint, you can contact the NFA. They will work to resolve the issue. You will most likely use arbitration to settle the dispute. The NFA can dig deeper if they suspect a pattern of misconduct with an individual or firm.
Most futures traders never have to contact the NFA, but it’s nice to know they are there.
