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March 02, 2001
Proposed Amendments to NFA's Articles of Incorporation
Important: Ballot Enclosed
On February 15, 2001, NFA's Board of Directors ("Board") ratified a proposal to amend NFA's Articles of Incorporation ("Articles") to update NFA's fundamental purposes.
EXPLANATION OF AMENDMENTS
As the industry changes, the types of services which NFA performs on behalf of the industry must also change. To that end, NFA's Board has authorized NFA to perform trade practice and market surveillance, along with other regulatory services, on behalf of evolving electronic exchanges. The regulatory services that NFA performs for these exchanges are consistent with NFA's fundamental mission of broadening the benefits of self-regulation for our Members and the users of the markets.
The complete statement of NFA's fundamental purposes is set forth in Section 1 of Article III of NFA's Articles:
All of the new services NFA might perform and the new ways of providing those services are designed to "promote the improvement of business conditions," relieve the Commission "from the substantial burden of direct regulation" of NFA Members and to facilitate "the public's ability to avail itself of the industry's expanding services." The only portion of Section 1 which seems badly out of date is in subsection (iii). The fact is that the Commission no longer devotes significant resources to the registration of industry professionals, the approval of contract market rules or to the approval of new contracts, and relieving the Commission of those functions is not how NFA "facilitates… the public's ability to avail itself of the industry's expanding services." The Board has amended Subsection (iii) to reflect the evolving roles for NFA that the Board has already approved.
The proposed amendments to Article III are set forth below. Additions are underscored and deletions are stricken through.
PLEASE NOTE: The Article amendments set forth below require the affirmative vote of two-thirds of those Members actually voting in the Contract Market category and a majority of those Members actually voting in the FCM, LTM and IB category and the Industry Participant (CPO and CTA) category.
Please use the enclosed ballot to vote and submit it to NFA by April 2, 2001 in the postage-paid, self-addressed envelope which is also enclosed.
YOUR BALLOT MUST BE HAND-DELIVERED TO NFA OR POSTMARKED NO LATER THAN APRIL 2, 2001 OR IT WILL NOT BE COUNTED.
ARTICLES OF INCORPORATION
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ARTICLE III: PURPOSES
Section 1: Fundamental Purposes.
Subject to the limitations in Section 2 of this Article, the fundamental purposes of NFA are to promote the improvement of business conditions and the common business interests of persons engaged in commodity futures or related activity (i) undertaking the regulation of persons that are members of NFA (hereinafter "Members") as set forth in this Article; (ii) relieving the Commodity Futures Trading Commission (hereinafter "Commission") from the substantial burden of direct regulation in such matters; and (iii)