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Notice I-01-10

May 18, 2001

Increase in Membership Dues and Registration Fees

Since NFA’s inception, assessment fees have been the primary funding mechanism for the Association, accounting for 80% to 85% of NFA’s total revenue every year. At its strategic planning meeting in January 2001, the Executive Committee agreed that NFA should begin to reduce its reliance on the assessment fee as a revenue source.

Consequently, at its May 17, 2001 meeting, NFA’s Board of Directors ("the Board") approved a reduction in assessment fees from $.18 to $.14 per round-turn futures contract and from $.09 to $.07 per options transaction. The new fees will become effective on July 1, 2001, unless the CFTC notifies NFA that it intends to review the changes.

When the Board approved the decrease in the assessment fees, it recognized that NFA would intentionally be operating at a deficit, resulting in a reduction to NFA’s operating reserves. While the Board felt that the assessment fee reduction was appropriate, the Board also did not want to take any action that might impair NFA’s ability to operate effectively.

Therefore, to partially offset the decrease in assessment fee revenue, the Board approved increases to NFA’s membership dues and registration fees, which have remained unchanged since 1992. NFA recognizes that the membership dues and registration fees must not erect barriers to entering or remaining in the futures industry. NFA analyzed similar fees charged in the securities industry in determining the new levels. Even with the increases, NFA will still only recover a small portion of its costs for providing regulatory services and performing its registration function via revenue derived from membership dues and registration fees.

This decision to increase dues and fees was taken after a lengthy process that included a thorough review of all relevant issues not only by NFA’s Board and Executive Committee, but also by the Finance Committee and NFA’s three Advisory Committees (FCM, CPO/CTA and IB). NFA’s new membership dues and registration fees are scheduled to become effective on July 1, 2001. The Board amended Bylaw 1301 to implement the following membership dues:

Membership Dues

Member Category Annual Dues
FCM (for which NFA is DSRO) $7,500
FCM $2,000
CPO $1,000
CTA $1,000
IB $1,000

Additionally, the Board amended Registration Rule 203 to implement the following registration application fees:

Registration Fees

Registration Category Fee
FCM $500
CPO $200
CTA $200
IB $200
AP $ 85*
Principal $ 85
Floor Broker $ 85
Floor Trader $ 85

The increases to membership dues and registration fees and the decreases to the assessment fees have been submitted to the CFTC for approval. NFA anticipates that these changes will become effective on July 1, 2001. Members will receive further notification only if the changes do not become effective on July 1, 2001.

If you have any questions, please feel free to contact NFA’s Information Center at (312) 781-1410.

* The fee is $65 when an AP applicant’s sponsor electronically files with NFA a Form 8-R (without fingerprint cards) within 90 days after the applicant files with the NASD an application (with fingerprint cards) for registration as a General Securities Representative.

NFA is the premier independent provider of efficient and innovative regulatory programs that safeguard the integrity of the futures markets.
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