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May 24, 2016

NFA's Board approves Fiscal Year 2017 budget

On May 19, NFA's Board of Directors approved a budget of $91 million for the upcoming fiscal year. NFA's operating expenses are budgeted to increase by approximately 10 percent, due in large part to an increase in NFA's staff. NFA's fiscal year runs from July 1 through June 30.

In FY 2017, budgeted resources for NFA's regulatory programs for swap dealers (SD) and major swaps participants (MSP) will continue to expand due to NFA's additional responsibilities for the review, approval and monitoring of initial margin models for uncleared swaps. NFA will hire staff and engage experts with extensive quantitative knowledge and experience to implement this critical regulatory program.

"On January 6, 2016, the CFTC published its final margin requirements for the uncleared swaps of SDs and MSPs," says Jamila Piracci, Vice President of OTC Derivatives. "These requirements allow SDs subject to the CFTC's Margin Rules to choose between using either a standardized calculation for initial margin or an internal risk-based initial margin model that has been approved by the CFTC or NFA. Since early January, NFA staff has been developing and implementing a margin model approval and an ongoing monitoring process."

Staffing is also budgeted to increase for NFA's Information Systems (IS) department. The additional IS resources are needed to address the ongoing rebuilding efforts of major systems like NFA's Online Registration System as well as the continuing demands for other systems to support new regulatory requirements.

NFA operates on the premise that each regulatory program (futures, swaps, off-exchange retail forex and market regulation) should be financially self-sufficient, and that each program should generate enough revenue to recover the costs associated with operating their respective programs.

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