Background/Credit Checks

An integral part of the marketplace entails having good faith users that can fulfill their obligations. NFA has direct links to futures and securities industry databases which list past violations/infractions by the user. NFA will conduct credit reports and disciplinary background checks to ensure that the individuals and firms conducting business on your exchange have the appropriate qualifications.

Trade Practice and Market Surveillance

Ensuring the fair treatment of customers and maintaining orderly markets are essential ingredients for the success of your business. Although your marketplace will develop its own rules and procedures, NFA will provide tools and programs to identify a variety of events that may be indications of market manipulation, including trading ahead of customers, taking both sides of a trade, simultaneous buys and sells and off-exchange transactions.

NFA also will profile markets and individual traders to dynamically assess market participants' trading patterns for unusual activity.

We will monitor market activity in terms of price by checking your prices with independent vendors. NFA will also review your market's volume and monitor for concentrations of ownership and the aggregation of positions owned by common principals. This will allow NFA to respond quickly to market situations that might have an adverse effect on the exchange.

Financial Analysis and On-Site Review

To ensure that the users of your marketplace are meeting their financial obligations, NFA will monitor their financial statements and related data. We will also perform stress tests and monitor the effects that current market conditions have on a firm's compliance with the market's minimum financial requirements.

NFA will also perform on behalf of your exchange those auditing and financial surveillance functions required by the Commodity Futures Trading Commission (CFTC) or requested by the exchange to assess a market user's financial wherewithal.

Risk Management Services

Significant market movements can have great impact on users' positions, which can affect their capital positions and liquidity and ultimately affect the financial viability of the market. NFA can perform a risk assessment of complex transactions over a period of increased volatility and determine if sufficient resources are there for market participants to cover future obligations.

Dispute Resolution Services

NFA has an established program in place for the resolution of disputes between market participants. The program, consisting of both arbitration and mediation procedures, is informal, convenient, inexpensive and prompt. We will also be able to offer these services on-line in the near future.