Section 10(g) of NFA's Code of Arbitration (Code) and NFA's Member Arbitration Rules authorizes NFA to summarily suspend an NFA Member or Associate if the Member or Associate fails to pay an NFA arbitration award or a settlement reached in an NFA arbitration or mediation proceeding within 30 days. Members and Associates receive 30 days written notice before the suspension becomes effective, giving them a minimum of 60 days to satisfy the award or the settlement. Once the suspension becomes effective, a Member or Associate can get it lifted at any time simply by paying the amount due under the award or settlement.
On January 10, 2005, the Commission adopted amendments to Part 171 to clarify that it will not review NFA membership suspensions based solely on a Member's or Associate's failure to pay a settlement or arbitration award. Section 10(g) of NFA's Code of Arbitration and Member Arbitration Rules currently states that a Member or Associate can appeal these suspensions to the Commission. The amendments eliminate the references to Commission review.
As mentioned earlier, NFA is invoking the "ten-day" provision of Section 17(j) of the Commodity Exchange Act. NFA intends to make the amendments to Section 10(g) of NFA's Code of Arbitration and Member Arbitration Rules effective ten days after receipt of this submission by the Commission, unless the Commission notifies NFA that the Commission has determined to review the proposal for approval.