Proposed Rule

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Proposed Amendments to NFA Code of Arbitration and Member Arbitration Rules (additions are underscored and deletions are stricken)

CODE OF ARBITRATION

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SECTION 1. DEFINITIONS.

(a) "Aggregate Claim" - means an Arbitration Claim plus any counterclaim, cross-claim and third-party claim filed in the same matter under this Code.

(a) (b) "Associate" - means a person who is registered with NFA as an Associate or was so registered when the acts or transactions that are the subject of dispute occurred. (Under NFA Bylaws every person who is associated with a Member within the meaning of the term "associated person" as used in Section 4k of the Commodity Exchange Act, and who is required to be registered as such with the Commission, must register with NFA as an Associate.)

(b) (c) "Claim" - means a Demand for an Arbitration Claim, counterclaim, cross-claim or third-party claim filed under this Code.

(c) (d) "Claimant" - means a person making a proper and timely claim under this Code.

(d) (e) "Commission" - means the Commodity Futures Trading Commission.

(e) (f) "Commodity Pool Operator" or "CPO" - means a commodity pool operator as that term is used in the Commodity Exchange Act, and that is required to be registered as such under the Commodity Exchange Act and Commission Rules.

(f) (g) "Commodity Trading Advisor" or "CTA" - means a commodity trading advisor as that term is used in the Commodity Exchange Act, and that is required to be registered as such under the Commodity Exchange Act and Commission Rules.

(g) (h) "Contract Market" - means an exchange designated by the Commission as a contract market in one or more commodities.

(h) (i) "Cross-claim" - means a claim filed by one Respondent against a co-Respondent.

(i) (j) "Futures Commission Merchant" or "FCM" - means a futures commission merchant as that term is used in the Commodity Exchange Act, and that is required to be registered as such under the Commodity Exchange Act and Commission Rules.

(j) (k) "Floor Broker" - means a floor broker as that term is used in the Commodity Exchange Act.

(k) (l) "Futures" - includes:

    (1) options contracts traded on a Commission-licensed exchange;

    (2) options contracts granted by a person that has registered with the Commission under Section 4c(d) of the Act as a grantor of such option contracts or has notified the Commission under the Commission's Rules that it is qualified to grant such option contracts;

    (3) foreign futures and foreign options transactions made or to be made on or subject to the rules of a foreign board of trade for or on behalf of foreign futures and foreign options customers as those terms are defined in the Commission's Rules;

    (4) leverage transactions as that term is defined in the Commission's Rules; and

    (5) security futures products, as that term is defined in Section 1a(32) of the Act.

(l) (m) "Introducing Broker" or "IB" - means an introducing broker as that term is used in the Commodity Exchange Act, and that is required to be registered as such under the Commodity Exchange Act and Commission Rules.

(m) (n) "Leverage Transaction Merchant" or "LTM" - means a leverage transaction merchant as that term is used in Commission Rules, and that is required to be registered as such under the Commodity Exchange Act and Commission Rules.

(n) (o) "Member" - means a Member of NFA or a person that was a Member at the time the acts or transactions that are the subject of the dispute occurred.

(o) (p) "NFA" - means National Futures Association.

(p) (q) "Panel" - means the arbitration panel appointed pursuant to Section 4(a) of this Code.

(q) (r) "Person" - includes individuals, corporations, partnerships, trusts, associations and other entities.

(r) (s) "Pleading" - means a Demand for an Arbitration Claim, counterclaim, cross-claim, third-party claim, Answer or Reply filed under this Code.

(s) (t) "President" - means the President of NFA.

(t) (u) "Respondent" - means a person against whom a claim is asserted under this Code.

(u) (v) "Secretary" - means the Secretary of NFA.

(v) (w) "Third-party Claim" - means a claim filed by a Respondent against a person not a party to the action.

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SECTION 2. ARBITRABLE DISPUTES.

(a) Mandatory Arbitration.

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(2) Counterclaims, Cross-claims and Third-party Claims. Except as provided in Sections 5 and 6 of this Code with respect to timeliness requirements, a counterclaim, cross-claim or third-party claim may be asserted in an arbitration brought under this Code if the counterclaim, cross-claim or third-party claim arises out of an act or transaction that is the subject of the Demand for Arbitration Claim.

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SECTION 5. TIME PERIOD FOR ARBITRATION.

No Demand for Arbitration Claim may be arbitrated under this Code unless a Demand an Arbitration Claim or notice of intent to arbitrate (S see Sections 6(a) and (c) below) is received by NFA within two years from the date when the party filing the Demand for Arbitration Claim knew or should have known of the act or transaction that is the subject of the controversy. Except as is provided in Sections 6(f) and (h) below, no counterclaim, cross-claim or third-party claim may be arbitrated under this Code unless it is asserted in a timely filed Answer in accordance with Section 6(e) below. NFA shall reject any claim that is not timely filed. If, in the course of any arbitration, the Panel determines that the requirements of this section have not been met as to a particular claim, the Panel shall thereupon terminate the arbitration of the claim without decision or award.

SECTION 6. INITIATION OF ARBITRATION.

An arbitration proceeding under this Code shall be initiated as follows:

(a) Notice of Intent to Arbitrate.

If the two-year time limit under Section 5 of this Code is close to expiring, a person wanting to file a Demand for an Arbitration Claim may notify NFA, either in writing or orally, of such person's intent to arbitrate. NFA shall maintain a record of the receipt of each such notice and shall promptly provide such person with a copy of this Code and a Demand for an Arbitration Claim form.

(b) Demand for Arbitration Claim Pursuant to a Notice of Intent to Arbitrate.

If a person who files a notice of intent to arbitrate decides to proceed with NFA arbitration, such person shall, within 35 days after the date NFA provided the person with a copy of the Code and a Demand for an Arbitration Claim form under Section 6(a) above, serve a completed Demand for Arbitration Claim on NFA.

(c) Demand for Arbitration Claim.

NFA shall promptly review each Demand for Arbitration Claim for completeness. Any Demand for Arbitration Claim which NFA deems to be incomplete, or which is not accompanied by the appropriate fee, shall be returned to the filing party by certified mail NFA. In that event, such person the filing party shall serve a completed Demand for Arbitration Claim on NFA, together with any unpaid fee, within 20 days following transmittal service by NFA. NFA shall reject any Demand for Arbitration Claim which has not been timely filed, or for which the appropriate fee has not been paid.

(d) Notice to Respondent.

    (1) NFA shall promptly serve a copy of the completed Demand for Arbitration Claim on each person named therein as a Respondent, and a copy of any agreement to arbitrate.

    (2) If a guaranteed IB is named in the Demand for Arbitration Claim as a Respondent, NFA shall promptly serve a copy of the completed Demand for Arbitration Claim on the Member FCM that guaranteed the IB during the time of the acts or transactions involved in the claim. That Member FCM may intervene in the arbitration proceeding if it chooses to.

(e) Answer to a Demand for Arbitration Claim.

The A Respondent shall serve an its Answer on NFA within 45 days from the date of service of the Demand for Arbitration on the Respondent by NFA. The Respondent shall and concurrently serve a copy of the Answer on the Claimant within the time period provided below. Any Member FCM served with the Demand for Arbitration Claim under Section 6(d)(2) above that wishes to intervene in the arbitration proceeding must serve an Answer and written notice of intervention on NFA within 45 days from the date of service of the Demand for Arbitration on the Member FCM by NFA. The Member FCM shall and concurrently serve a copy of the Answer and notice of intervention on the Claimant within the time period provided below for filing the Answer. An allegation in the Demand for Arbitration Claim that is not denied in the Answer shall be deemed by the Panel to be admitted.

    (1) Claims of $25,000 or Less. Where the Arbitration Claim amount does not exceed $25,000, the Answer shall be served within 20 days following service of the Arbitration Claim by NFA.

    (2) Claims of more than $25,000 through $50,000. Where the Arbitration Claim amount exceeds $25,000 but is not more than $50,000, the Answer shall be served within 45 days following service of the Arbitration Claim by NFA. An arbitration service fee of $275.00 shall accompany each Answer. Any Answer which is not accompanied by the appropriate fee shall be returned to the filing party by NFA. In that event, the filing party shall serve a completed Answer on NFA, together with any unpaid fee, within 20 days following service by NFA. NFA shall reject any Answer for which the appropriate fee has not been paid. Each Respondent who files an Answer but does not pay the service fee will have waived its right to an oral hearing and to otherwise participate in the proceeding. However, the Panel may, for good cause shown, accept the Answer and allow the Respondent to participate.

    (3) Claims of more than $50,000. Where the Arbitration Claim amount exceeds $50,000, the Answer shall be served within 45 days following service of the Arbitration Claim by NFA. An arbitration service fee of $675.00 shall accompany each Answer. Any Answer which is not accompanied by the appropriate fee shall be returned to the filing party by NFA. In that event, the filing party shall serve a completed Answer on NFA, together with any unpaid fee, within 20 days following service by NFA. NFA shall reject any Answer for which the appropriate fee has not been paid. Each Respondent who files an Answer but does not pay the service fee will have waived its right to an oral hearing and to otherwise participate in the proceeding. However, the Panel may, for good cause shown, accept the Answer and allow the Respondent to participate.

(f) Counterclaim and Cross-claim.

Any counterclaim or cross-claim under Section 2(a)(2) must be asserted in the Answer, unless the person against whom the counterclaim or cross-claim is asserted consents to a later assertion of the counterclaim or cross-claim. If any counterclaim or cross-claim is asserted, the party asserting the counterclaim or cross-claim shall promptly remit the appropriate fee to NFA. (See Sections 11 and 18 below.). Any counterclaim or cross-claim which NFA deems to be incomplete, or which is not accompanied by the appropriate fee, shall be returned by certified mail to the filing party by NFA. In that event, such person the filing party shall serve a completed counterclaim or cross-claim on NFA, together with any unpaid fee, within 20 days following service by NFA the time period provided below. NFA shall reject any counterclaim or cross-claim which has not been timely filed, or for which the appropriate fee has not been paid.

    (1) Claims of $25,000 or Less. Where the aggregate claim amount does not exceed $25,000, the completed counterclaim or cross-claim shall be served within 10 days following service of the incomplete counterclaim or cross-claim by NFA.

    (2) Claims of more than $25,000. Where the aggregate claim amount exceeds $25,000, the completed counterclaim or cross-claim shall be served within 20 days following service of the incomplete counterclaim or cross-claim by NFA.

(g) Reply to Counterclaim or Cross-claim.

The person against whom the counterclaim or cross-claim is asserted shall serve its r Reply to the counterclaim or cross-claim by serving a Reply on NFA within 35 days after the date of service of the Answer, counterclaim or cross-claim by NFA, and concurrently shall serve a copy of the Reply on the counterclaiming or cross-claiming Respondent within the time period provided below. Any allegation in the counterclaim or cross-claim that is not denied in the Reply shall be deemed by the Panel to be admitted.

    (1) Claims of $25,000 or Less. Where the aggregate claim amount does not exceed $25,000, the Reply shall be served within 10 days following service of the Answer, counterclaim or cross-claim by NFA.

    (2) Claims of more than $25,000. Where the aggregate claim amount exceeds $25,000, the Reply shall be served within 35 days following service of the Answer, counterclaim or cross-claim by NFA.

(h) Third-party Claim.

Any third-party claim under Section 2(a)(2) must be asserted in the Answer, unless the third party consents to a later assertion of the claim. If the third party is not a Member or Associate, such person must agree or have agreed to submit to arbitration. If any third-party claim is asserted, the Respondent asserting the third-party claim shall promptly remit the appropriate fee to NFA. (See Sections 11 and 18 below.). Any third-party claim, which NFA deems to be incomplete, or which is not accompanied by the appropriate fee, shall be returned by certified mail to the filing party by NFA. In that event, such person the filing party shall serve a completed third party claim on NFA, together with any unpaid fee, within 20 days following service by NFA the time period provided below. NFA shall reject any third-party claim which has not been timely filed, or for which the appropriate fee has not been paid.

    (1) Claims of $25,000 or Less. Where the aggregate claim amount does not exceed $25,000, the completed third-party claim shall be served within 10 days following service of the incomplete third-party claim by NFA.

    (2) Claims of more than $25,000. Where the aggregate claim amount exceeds $25,000, the completed third-party claim shall be served within 20 days following service of the incomplete third-party claim by NFA.

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(j) Answer to Third-party Claim.

The A third-party Respondent shall serve an its Answer on NFA within 45 days from the date of service of the third-party claim on the Respondent by NFA. The Respondent shall and concurrently serve a copy of the Answer on the third-party Claimant within the time period provided below. An allegation in the third-party claim that is not denied in the Answer shall be deemed by the Panel to be admitted.

    (1) Claims of $25,000 or Less. Where the aggregate claim amount does not exceed $25,000, the Answer shall be served within 20 days following service of the third-party claim by NFA.

    (2) Claims of more than $25,000. Where the aggregate claim amount exceeds $25,000, the Answer shall be served within 45 days following service of the third-party claim by NFA.

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(m) Consolidation and Joinder.

(1) When Demands for Arbitration Claims involving common questions of fact or arising from the same act or transaction are received by the Secretary, the Secretary may, whether or not at the request of any party, order any or all of the proceedings to be consolidated for hearing in the interest of providing a fair, equitable and expeditious procedure and may take such action concerning the proceedings herein as may tend to avoid unnecessary or unreasonable delay.

(2) A party may join multiple claims in a single Demand Arbitration Claim if the claims involve common questions of fact, arise from the same act or transactions, are filed by the same person against the same Respondents (even if the person filing the Demand Arbitration Claim is acting in different capacities) or are filed on behalf of an individual and a corporation against the same Respondents if the individual is the sole shareholder of the corporation. The Secretary may, whether or not at the request of any party, order any or all joined claims to be separated in the interest of providing a fair, equitable or expeditious procedure or to avoid unnecessary or unreasonable delay.

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SECTION 8. PRE-HEARING.

(a) Exchange of Documents and Written Information.

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(3) All other requests for documents and written information shall be served as follows:

    (i) Where the aggregate claim amount does not exceed $25,000, the requesting party shall serve its requests for documents and written information on the responding party no later than 20 days after the last pleading is due. The responding party shall serve the documents and written information, including written objections, no later than 20 days after the request is due. (ii) Where the aggregate claim amount exceeds $25,000, the requesting party shall serve its request for documents and written information on the responding party by the requesting party no later than 30 days after the last pleading is due. The responding party shall serve the requesting party with the documents and written information, including written objections, no later than 30 days after the request is due.

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(6) Unless the Panel directs otherwise, requests to compel will be decided on the written submissions of the parties. The Panel, in its discretion, may schedule a discovery conference to decide any outstanding discovery issues. The conference may be conducted in person or by telephone.

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(b) Documents to be Introduced into Evidence.

(1) Unless the Panel directs otherwise At least 35 days prior to the date assigned for an oral hearing, each party shall serve on every other party all documents in such party's possession which the party intends to introduce into evidence at the hearing as part of its direct case and shall concurrently serve sufficient copies of the documents on NFA at least 10 days prior to the date assigned for an oral hearing.

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(c) Hearing Plan.

The parties shall cooperate with NFA in the formulation of a written hearing plan. A hearing plan is a written document that summarizes each claim, Answer and Reply; identifies any facts the parties have agreed to; identifies the factual and legal issues in dispute; and lists the witnesses and exhibits that will be presented at the hearing. The parties shall serve on NFA and all parties a joint hearing plan, or separate hearing plans if they cannot agree on a joint one, no later than 30 days before the oral hearing date, unless the Panel directs otherwise. The Panel, in its discretion, may conduct a hearing plan conference with the parties in person or by telephone to modify the plan.

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(f) Pre-Hearing Decisions by the Arbitrators.

    (1) For cases that will be decided through a summary proceeding, the Panel will decide all motions as part of the summary review, except for those related to discovery or postponement requests.

    (2) With the consent of the other Panel members, one or more of the arbitrators may act on behalf of the Panel to decide any pre-hearing motions from the parties or to conduct any discovery or pre-hearing plan conference with the parties. However, the Panel may not postpone the hearing or impose sanctions, dismiss a party, or dismiss all or any portion of a claim without a majority decision.

(g) Pre-Hearing Conference.

For cases that will be decided through an oral hearing, NFA may schedule a pre-hearing conference with the Panel and the parties. The notice scheduling the pre-hearing conference will specify the issues to be covered at the conference, including identifying outstanding discovery disputes, setting deadlines for other motions and scheduling the hearing. The conference will be conducted by telephone within 30 days after the motion to compel due date, unless the Panel directs otherwise.

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SECTION 9. HEARING.

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(b) Place, Time and Notice of Hearing.

Except as provided in Section 8(g) or paragraph (i) of this section, the place and time of the hearing shall be determined in the sole discretion of the Secretary, who shall endeavor to accommodate, if possible, the preferences of all parties and members of the Panel. Upon setting the initial hearing date, NFA shall serve notice on each party at least 45 days before the hearing of the date, time and place. NFA shall give reasonable notice of any rescheduled oral hearing date.

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SECTION 11. ARBITRATION FEES.

(a) Filing and Hearing Fees.

    (1) Except as provided in Section 18 of this Code, each party filing a claim under this Code shall pay a filing and hearing fee based on the amount claimed, including punitive and treble damages but exclusive of interest and costs, as follows:
Amount of Claim

$0.00 - $2,500.00
$2,500.01 - $5,000.00
$5,000.01 - $10,000.00
$10,000.01 - $15,000.00
$15,000.01 - $25,000.00
$25,000.01 - $50,000.00
$50,000.01 - $150,000.00
 
$150,000.00 - $500,000.00
More than $500,000.00

Filing Fee

$ 50.00
$ 100.00
$ 150.00
$ 175.00
$ 200.00
$ 300.00
$ 550.00 plus 1% of excess over $50,000.00 
$1,550.00
$1,550.00

Hearing Fee

$ 125.00
$ 125.00
$ 125.00
$ 125.00
$ 125.00
$ 275.00
$1,275.00
 
$2,550.00
$5,100.00

 

 

 

 

 

 

 

 

 

 

NFA will assess hearing fees for discovery conferences, hearing plan conferences, and preliminary or other hearing sessions.

    (2) Where the hearing fees paid by the parties is not enough to cover the standard preset fees to be paid by NFA to the arbitrators, NFA shall collect additional fees to cover the fees to be paid to the arbitrators. If a case requires more than four days of hearing, the hearing fees will be twice the standard preset fees, unless the arbitrators order the fees to remain at the standard amount.

    (3) NFA shall also collect additional hearing fees when:

      (i) a party requests a preliminary hearing under Section 9(a);

      (ii) a party requests an oral hearing under Section 9(i)(2); or

      (iii) a party requests three arbitrators under Section 4(a)(1). However, where the sole arbitrator asks NFA to appoint two additional arbitrators, NFA shall assess the additional fees equally against the parties.

    (4) The arbitrators, in their discretion, may assess the entire fee against any party or may divide the fee among any or all parties. Hearing fees shall be paid to NFA in advance of the hearing sessions to which they apply.

(b) Refunds.

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(2) If all claims have been settled or withdrawn and NFA receives notice of the settlement or withdrawal at least eight five days in advance of the first scheduled pre-hearing or preliminary hearing conference date, the hearing fee shall be refunded to the party paying the fee if one is scheduled, or at least 30 days in advance of the first scheduled preliminary hearing date or oral hearing date, if no pre-hearing conference is scheduled, a full refund of the hearing fees paid under Section 11(a) and the arbitration service fees paid under Section 6(e) shall be made to the party paying the fee.

(3) If all claims have been settled or withdrawn and NFA receives written notice of the settlement or withdrawal at least 15 days in advance of the summary proceeding start date or first scheduled oral hearing date or preliminary hearing date, the hearing fees paid under Section 11(a) and arbitration service fees paid under Section 6(e) shall be refunded to the party paying the fee in accordance with the schedule below.

Amount of Claim

 
$0.00 - $25,00.00
$25,000.01 - $50,000.00
$50,000.01 - $150,000.00
$150,000.00 - $500,000.00
More than $500,000.00

Hearing Fee Refund

$ 125.00
$ 125.00
$ 925.00
$ 2,200.00
$ 4,750.00

Service Fee Refund

N/A
$ 125.00
$ 325.00
$ 325.00
$ 325.00

 

 

 

 

 

 

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SECTION 16. MISCELLANEOUS.

(a) Computation of Time.

(1) Except as otherwise provided in this Code, service shall be deemed to occur on the earlier of the date that the documents are faxed (as evidenced by affidavit of service), e-mailed (as evidenced by affidavit of service), postal mailed, (as evidenced by postmark or affidavit of service), or the date personally delivered, (as evidenced by affidavit of service).

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(b) Service of Process.

Unless otherwise indicated, service may be accomplished by hand delivery, or by first class or certified mail, or by use of a generally recognized overnight delivery service to the party's last known business or home address on record with NFA. Documents that are not pleadings may also be served by facsimile or electronic mail on NFA and any party who has consented to service by that method. All documents which are served on NFA shall be concurrently served on each party who has filed a pleading using methods designed to ensure that NFA and all parties will receive the documents on the same day. Service on a party's representative shall be service on the party.

(c) Address of Record.

A party shall promptly notify NFA of any change in the party's address or addresses, including the party's e-mail address or facsimile number, or the address of the party's representative on record with NFA.

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MEMBER ARBITRATION RULES

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SECTION 1. DEFINITIONS.

(a) "Aggregate Claim" - means an Arbitration Claim plus any counterclaim, cross-claim and third-party claim filed in the same matter under these Rules.

(a) (b) "Associate" - means a person who is registered with NFA as an Associate or was so registered when the acts or transactions that are the subject of dispute occurred. (Under NFA Bylaws every person who is associated with a Member within the meaning of the term "associated person" as used in Section 4k of the Commodity Exchange Act, and who is required to be registered as such with the Commission, must register with NFA as an Associate.)

(b) (c) "Claim" - means a Demand for an Arbitration Claim, counterclaim, cross-claim or third-party claim filed under these Rules.

(c) (d) "Claimant" - means a person making a proper and timely claim under these Rules.

(d) (e) "Commission" - means the Commodity Futures Trading Commission.

(e) (f) "Contract Market" - means an exchange designated by the Commission as a contract market in one or more commodities.

(f) (g) "Cross-claim" - means a claim filed by one Respondent against a co-Respondent.

(g) (h) "Hearings" - includes both oral hearing and summary proceedings, unless otherwise specified.

(h) (i) "Member" - means a Member of NFA or a person that was a Member at the time the acts or transactions that are the subject of the dispute occurred.

(i) (j) "NFA" - means National Futures Association.

(j) (k) "Panel" - means the arbitration panel appointed pursuant to Section 3 of these Rules.

(k) (l) "Person" - includes individuals, corporations, partnerships, trusts, associations and other entities.

(l) (m) "Pleading" - means a Demand for an Arbitration Claim, counterclaim, cross-claim, third-party claim, Answer or Reply filed under these Rules.

(m) (n) "President" - means the President of NFA.

(n) (o) "Respondent" - means a person against whom a claim is asserted under these Rules.

(o) (p) "Secretary" - means the Secretary of NFA.

(p) (q) "Self-regulatory organization" - means a contract market, a registered national securities exchange, or a registered national securities association.

(q) (r) "Third-party Claim" - means a claim filed by a Respondent against a person not a party to the action.

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SECTION 2. ARBITRABLE DISPUTES.

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(c) Counterclaims, Cross-claims and Third-party Claims. Except as provided in Sections 4 and 5 of these Rules with respect to timeliness requirements, a counterclaim, cross-claim or third-party claim must be asserted in an arbitration brought under paragraph (a) above and may be asserted under paragraph (b) above if the counterclaim, cross-claim or third-party claim arises out of an act or transaction that is the subject of the Demand for Arbitration Claim.

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SECTION 4. TIME PERIOD FOR ARBITRATION.

No Demand for Arbitration Claim may be arbitrated under these Rules unless a Demand an Arbitration Claim or notice of intent to arbitrate (S see Sections 5(a) and (c) below) is received by NFA within two years from the date when the party filing the Demand for Arbitration Claim knew or should have known of the act or transaction that is the subject of the controversy. No counterclaim, cross-claim or third-party claim may be arbitrated under these Rules unless it is received by NFA within two years from the date when the party asserting the counterclaim, cross-claim or third-party claim knew or should have known of the act or transaction that is the subject of the counterclaim, cross-claim or third-party claim or it is served on NFA within 45 days from the date of service of the Demand for Arbitration Claim on the Respondent by NFA, whichever is later. NFA shall reject any claim that is not timely filed. If, in the course of any arbitration, the Panel determines that the requirements of this section have not been met as to a particular claim, the Panel shall thereupon terminate the arbitration of the claim without decision or award.

SECTION 5. INITIATION OF ARBITRATION

An arbitration proceeding under these Rules shall be initiated as follows:

    (a) Notice of Intent to Arbitrate.

    If the two-year time limit under Section 4 of these Rules is close to expiring, a person wanting to file a Demand for an Arbitration Claim may notify NFA, either in writing or orally, of such person's intent to arbitrate. NFA shall maintain a record of the receipt of each such notice and shall promptly provide such person with a copy of these Rules and a Demand for an Arbitration Claim form.

    (b) Demand for Arbitration Claim Pursuant to a Notice of Intent to Arbitrate.

    If a person who files a notice of intent to arbitrate decides to proceed with NFA arbitration, such person shall, within 35 days after the date NFA provided the person with a copy of the Rules and a Demand for an Arbitration Claim form under Section 5(a) above, serve a completed Demand for Arbitration Claim on NFA.

    (c) Demand for Arbitration Claim.

    NFA shall promptly review each Demand for Arbitration Claim for completeness. Any Demand for Arbitration Claim which NFA deems to be incomplete, or which is not accompanied by the appropriate fee, shall be returned to the filing party by certified mail NFA. In that event, such person the filing party shall serve a completed Demand for Arbitration Claim on NFA, together with any unpaid fee, within 20 days following transmittal service by NFA. NFA shall reject any Demand for Arbitration Claim which has not been timely filed, or for which the appropriate fee has not been paid.

    (d) Notice to Respondent.

      (1) NFA shall promptly serve a copy of the completed Demand for Arbitration Claim on each person named therein as a Respondent, and a copy of any agreement to arbitrate.

      (2) If a guaranteed IB is named in the Demand for Arbitration Claim as a Respondent, NFA shall promptly serve a copy of the completed Demand for Arbitration Claim on the Member FCM that guaranteed the IB during the time of the acts or transactions involved in the claim. That Member FCM may intervene in the arbitration proceeding if it chooses to.

    (e) Answer to a Demand for an Arbitration Claim

    The A Respondent shall serve an its Answer on NFA within 45 days from the date of service of the Demand for Arbitration on the Respondent by NFA. The Respondent shall and concurrently serve a copy of the Answer on the Claimant within the time period provided below. Any Member FCM served with the Demand for Arbitration Claim under Section 5(d)(2) above that wishes to intervene in the arbitration proceeding must serve an Answer and written notice of intervention on NFA within 45 days from the date of service of the Demand for Arbitration on the Member FCM by NFA. The Member FCM shall and concurrently serve a copy of the Answer and notice of intervention on the Claimant within the time period provided below for filing the Answer. An allegation in the Demand for Arbitration Claim that is not denied in the Answer shall be deemed by the Panel to be admitted.

      (1) Claims of $50,000 or Less. Where the Arbitration Claim amount does not exceed $50,000, the Answer shall be served within 20 days following service of the Arbitration Claim by NFA.

      (2) Claims of more than $50,000 through $100,000. Where the Arbitration Claim amount exceeds $50,000 but is not more than $100,000, the Answer shall be served within 45 days following service of the Arbitration Claim by NFA. An arbitration service fee of $275.00 shall accompany each Answer. Any Answer which is not accompanied by the appropriate fee shall be returned to the filing party by NFA. In that event, the filing party shall serve a completed Answer on NFA, together with any unpaid fee, within 20 days following service by NFA. NFA shall reject any Answer for which the appropriate fee has not been paid. Each Respondent who files an Answer but does not pay the service fee will have waived its right to an oral hearing and to otherwise participate in the proceeding. However, the Panel may, for good cause shown, accept the Answer and allow the Respondent to participate.

      (3) Claims of more than $100,000. Where the Arbitration Claim amount exceeds $100,000, the Answer shall be served within 45 days following service of the Arbitration Claim by NFA. An arbitration service fee of $675.00 shall accompany each Answer. Any Answer which is not accompanied by the appropriate fee shall be returned to the filing party by NFA. In that event, the filing party shall serve a completed Answer on NFA, together with any unpaid fee, within 20 days following service by NFA. NFA shall reject any Answer for which the appropriate fee has not been paid. Each Respondent who files an Answer but does not pay the service fee will have waived its right to an oral hearing and to otherwise participate in the proceeding. However, the Panel may, for good cause shown, accept the Answer and allow the Respondent to participate.

    (f) Counterclaim and Cross-claim.

    If any counterclaim or cross-claim is asserted, the party asserting the counterclaim or cross-claim shall promptly remit the appropriate fee to NFA. (See Section 11 below.). Any counterclaim or cross-claim which NFA deems to be incomplete, or which is not accompanied by the appropriate fee, shall be returned by certified mail to the filing party by NFA. In that event, such person the filing party shall serve a completed counterclaim or cross claim on NFA, together with any unpaid fee, within 20 days following service by NFA within the time period provided below. NFA shall reject any counterclaim or cross-claim which has not been timely filed, or for which the appropriate fee has not been paid.

      (1) Claims of $50,000 or Less. Where the aggregate claim amount does not exceed $50,000, the completed counterclaim or cross-claim shall be served within 10 days following service by NFA.

      (2) Claims of more than $50,000. Where the aggregate claim amount exceeds $50,000, the completed counterclaim or cross-claim shall be served within 20 days following service by NFA.

    (g) Reply to Counterclaim or Cross-claim.

    The person against whom the counterclaim or cross-claim is asserted shall serve its r Reply to the counterclaim or cross-claim by serving a Reply on NFA within 35 days after the date of service of the Answer, counterclaim or cross-claim by NFA, and concurrently shall serve a copy of the Reply on the counterclaiming or cross-claiming Respondent within the time period provided below. Any allegation in the counterclaim or cross-claim that is not denied in the Reply shall be deemed by the Panel to be admitted.

      (1) Claims of $50,000 or Less. Where the aggregate claim amount does not exceed $50,000, the Reply shall be served within 10 days from the date of service of the Answer, counterclaim or cross-claim by NFA.

      (2) Claims of more than $50,000. Where the aggregate claim amount exceeds $50,000, the Reply shall be served within 20 days from the date of service of the Answer, counterclaim or cross-claim by NFA.

    (h) Third-party Claim.

    A Respondent may file a third-party claim against a Member or Associate under these Rules. If any third-party claim is asserted, the Respondent asserting the third-party claim shall promptly remit the appropriate fee to NFA. (See Section 11 below.). Any third-party claim, which NFA deems to be incomplete, or which is not accompanied by the appropriate fee, shall be returned by certified mail to the filing party by NFA. In that event, the filing party shall serve a completed third party claim on NFA, together with any unpaid fee, within 20 days following service by NFA the time provided below. NFA shall reject any third-party claim which has not been timely filed, or for which the appropriate fee has not been paid.

      (1) Claims of $50,000 or Less. Where the aggregate claim amount does not exceed $50,000, the completed third-party claim shall be served within 10 days following service of the incomplete third-party claim by NFA.

      (2) Claims of more than $50,000. Where the aggregate claim amount exceeds $50,000, the completed third-party claim shall be served within 20 days following service of the incomplete third-party claim by NFA.

* * *

    (j) Answer to Third-party Claim.

    The A third-party Respondent shall serve an its Answer on NFA within 45 days from the date of service of the third-party claim on the Respondent by NFA. The Respondent shall and concurrently serve a copy of the Answer on the third-party Claimant within the time period provided below. An allegation in the third-party claim that is not denied in the Answer shall be deemed by the Panel to be admitted.

      (1) Claims of $50,000 or Less. Where the aggregate claim amount does not exceed $50,000, the Answer shall be served within 20 days following service of the third-party claim by NFA.

      (2) Claims of more than $50,000. Where the aggregate claim amount exceeds $50,000, the Answer shall be served within 45 days following service of the third-party claim by NFA.

* * *

    (m) Consolidation and Joinder.

      When Demands for Arbitration Claims involving common questions of fact or arising from the same act or transaction are received by the Secretary, the Secretary may, whether or not at the request of any party, order any or all of the proceedings to be consolidated for hearing in the interest of providing a fair, equitable and expeditious procedure and may take such action concerning the proceedings herein as may tend to avoid unnecessary or unreasonable delay.

      (2) A party may join multiple claims in a single Demand Arbitration Claim if the claims involve common questions of fact, arise from the same act or transactions, are filed by the same person against the same Respondents (even if the person filing the Demand Arbitration Claim is acting in different capacities) or are filed on behalf of an individual and a corporation against the same Respondents if the individual is the sole shareholder of the corporation. The Secretary may, whether or not at the request of any party, order any or all joined claims to be separated in the interest of providing a fair, equitable or expeditious procedure or to avoid unnecessary or unreasonable delay.

* * *

SECTION 7. PRE-HEARING.

(a) Exchange of Documents and Written Information.

* * *

    (3) All other requests for documents and written information shall be served as follows:

      (i) Where the aggregate claim amount does not exceed $50,000, the requesting party shall serve its requests for documents and written information on the responding party no later than 20 days after the last pleading is due. The responding party shall serve the documents and written information, including written objections, no later than 20 days after the request is due.

      (ii) Where the aggregate claim amount exceeds $50,000, the requesting party shall serve its request for documents and written information on the responding party by the requesting party no later than 30 days after the last pleading is due. The responding party shall serve the requesting party with the documents and written information, including written objections, no later than 30 days after the request is due.

* * *

    (6) Unless the Panel directs otherwise, requests to compel will be decided on the written submissions of the parties. The Panel, in its discretion, may schedule a discovery conference to decide any outstanding discovery issues. The conference may be conducted in person or by telephone.

* * *

    (b) Documents to be Introduced into Evidence.

    (1) Unless the Panel directs otherwise, A at least 35 10 days prior to the date assigned for an oral hearing, each party shall serve on every other party all documents in such party's possession which the party intends to introduce into evidence at the hearing as part of its direct case and shall concurrently serve sufficient copies of the documents on NFA at least 10 days prior to the date assigned for an oral hearing.

* * *

    (c) Hearing Plan.

    The parties shall cooperate with NFA in the formulation of a written hearing plan. A hearing plan is a written document that summarizes each claim, Answer and Reply; identifies any facts the parties have agreed to; identifies the factual and legal issues in dispute; and lists the witnesses and exhibits that will be presented at the hearing. The parties shall serve on NFA and all parties a joint hearing plan, or separate hearing plans if they cannot agree on a joint one, no later than 30 days before the oral hearing date, unless the Panel directs otherwise. The Panel, in its discretion, may conduct a hearing plan conference with the parties in person or by telephone to modify the plan.

    (g) Pre-Hearing Decisions by the Arbitrators.

      (1)For cases that will be decided through a summary proceeding, the Panel will decide all motions as part of the summary review, except for those related to discovery or postponement requests.

      (2) With the consent of the other Panel members, one or more of the arbitrators may act on behalf of the Panel to decide any pre-hearing motions from the parties to conduct any discovery or pre-hearing plan conference with the parties. However, the Panel may not postpone the hearing or impose sanctions, dismiss a party, or dismiss all or any portion of a claim without a majority decision.

    (h) Pre-Hearing Conference.

    For cases that will be decided through an oral hearing, NFA may schedule a pre-hearing conference with the Panel and the parties. The notice scheduling the pre-hearing conference will specify the issues to be covered at the conference, including identifying outstanding discovery disputes, setting deadlines for other motions and scheduling the hearing. The conference will be conducted by telephone within 30 days after the motion to compel due date, unless the Panel directs otherwise.

* * *

SECTION 9. HEARING.

* * *

    (b) Place, Time and Notice of Hearing.

    Except as provided in Section 7(h) or paragraph (i) of this section, T the place and time of the hearing shall be determined in the sole discretion of the Secretary, who shall endeavor to accommodate, if possible, the preferences of all parties and members of the Panel. Upon setting the initial hearing date, NFA shall serve notice on each party at least 45 days before the hearing of the date, time and place. NFA shall give reasonable notice of any rescheduled oral hearing date.

* * *

SECTION 11. ARBITRATION FEES.

    (a) Filing and Hearing Fees.

      (1) Each Member or Associate filing a claim under these Rules shall pay a filing and hearing fee based on the amount claimed, including punitive and treble damages but exclusive of interest and costs, as follows:

Amount of Claim

Filing Fee

Hearing Fee

$ 0.00 - $ 10,000.00

$ 750.00

$ 125.00

$ 10,000.01 - $ 20,000.00

$1,900.00

$ 125.00

$ 20,000.01 - $ 50,000.00

$1,900.00

$ 125.00 275.00

$ 50,000.01 - $100,000.00

$3,000.00 4,400.00

$ 275.00 1,275.00

$100,000.01 - $150,000.00

$4,400.00

$1,275.00

$150,000.01 - $500,000.00

$4,400.00

$2,550.00

More than $500,000.00

$4,400.00

$5,100.00

NFA will assess hearing fees for discovery conferences, hearing plan conferences, and preliminary or other hearing sessions.

    (2) Where the hearing fees paid by the parties is not enough to cover the standard preset fees to be paid by NFA to the arbitrators, NFA shall collect additional fees to cover the fees to be paid to the arbitrators. If a case requires more than four days of hearing, the hearing fees will be twice the standard preset fees, unless the arbitrators order the fees to remain at the standard amount.

    (3) NFA shall also collect additional hearing fees when:

      (i) a party requests a preliminary hearing under Section 9(a);

      (ii) a party requests an oral hearing under Section 9(i)(2); or

      (iii) a party requests three arbitrators under Section 3(a)(1). However, where the sole arbitrator asks NFA to appoint two additional arbitrators, NFA shall assess the additional fees equally against the parties.

    (4) The arbitrators, in their discretion, may assess the entire fee against any party or may divide the fee among any or all parties. Hearing fees shall be paid to NFA in advance of the hearing sessions to which they apply.

(b) Refunds.

* * *

    (2) If all claims have been settled or withdrawn and NFA receives notice of the settlement or withdrawal at least eight five days in advance of the first scheduled pre-hearing or preliminary hearing conference date, the hearing fee shall be refunded to the party paying the fee if one is scheduled, or at least 30 days in advance of the first scheduled preliminary hearing date or oral hearing date, if no pre-hearing conference is scheduled, a full refund of the hearing fees paid under Section 11(a) and the arbitration service fees paid under Section 5(e) shall be made to the party paying the fee.

    (3) If all claims have been settled or withdrawn and NFA receives written notice of the settlement or withdrawal at least 15 days in advance of the summary proceeding start date or first scheduled oral hearing date or preliminary hearing date, the hearing fees paid under Section 11(a) and arbitration service fees paid under Section 5(e) shall be refunded to the party paying the fee in accordance with the schedule below.

Amount of Claim

Hearing Fee Refund

Service Fee Refund

$ 0.00 - $ 50,000.00

$ 125.00

N/A

$ 50,000.01 - $100,000.00

$ 125.00

$125.00

$100,000.01 - $150,000.00

$ 925.00

$325.00

$150,000.01 - $500,000.00

$2,200.00

$325.00

More than $500,000.00

$4,750.00

$325.00

* * *

SECTION 15. MISCELLANEOUS.

(a) Computation of Time.

    (1) Except as otherwise provided in these Rules, service shall be deemed to occur on the earlier of the date that the documents are faxed (as evidenced by affidavit of service), e-mailed (as evidenced by affidavit of service), postal mailed, (as evidenced by postmark or affidavit of service), or the date personally delivered, (as evidenced by affidavit of service).

* * *

(b) Service of Process.

Unless otherwise indicated, service may be accomplished by hand delivery, or by first class or certified mail, or by use of a generally recognized overnight delivery service to the party’s last known business or home address on record with NFA. Documents that are not pleadings may also be served by facsimile or electronic mail on NFA and any party who has consented to service by that method. All documents which are served on NFA shall be concurrently served on each party who has filed a pleading using methods designed to ensure that NFA and all parties will receive the documents on the same day. Service on a party’s representative shall be service on the party.

(c) Address of Record.

A party shall promptly notify NFA of any change in the party's address or addresses, including the party's e-mail address or facsimile number, or the address of the party's representative on record with NFA.

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