Member Newsletter

NFA names Michael Piracci to head its New York office
On August 14, Michael Piracci joined NFA as an Associate Director of Compliance. As such, Mr. Piracci oversees and manages compliance activities for the New York region, which includes NFA Member firms located in New York and certain surrounding states.

Mr. Piracci comes to NFA from the Commodity Futures Trading Commission (CFTC), where he served as an attorney advisor in the Division of Clearing and Intermediary Oversight. At the Commission, Mr. Piracci acted as the lead attorney for the Division with regard to the CFTC's jurisdiction relating to retail off-exchange currency (forex) trading and worked closely with the Commission's Division of Enforcement on investigations and enforcement matters.

Member Outreach Programs
NFA participated in a number of industry events during the past few months as part of its Member Outreach initiative. On September 16, more than 80 people attended NFA's "Issues and Answers 2003" Member meeting in Chicago. NFA staff members gave presentations on a variety of topics, including forex, disaster recovery, promotional material and anti-money laundering. NFA Members also had the opportunity to have informal discussions with individual staff members at designated "discussion tables." NFA also held an "Issues and Answers" meeting on Tuesday, November 11, in Fort Lauderdale, Florida.

NFA staff participated as speakers at two concurrent industry events in Chicago: the Futures Industry Association's (FIA) annual Futures and Options Expo, November 5-7, and the National Introducing Brokers Association's (NIBA) annual conference, November 7-8. At the FIA Expo, NFA General Counsel Thomas Sexton was one of the panelists at a session addressing "What every intermediary needs to know about the Forex business." Associate Director of Compliance Patricia Cushing represented the Association at the NIBA conference's "Q&A with the NFA" session, and Compliance Team Manager Denise Bent participated in a panel discussion on "Electronic Marketing and Website Development." NFA also sponsored exhibit booths at both conferences to provide conference attendees with the opportunity to discuss currently regulatory issues with NFA staff.

Investor Outreach Program
As part of its efforts to expand its investor outreach program, NFA will sponsor an exhibit booth at the Traders Expo, November 20-23, in Las Vegas. More than 4,000 traders are expected to attend the event.

"Exhibiting at the Traders Expo gives us the opportunity to familiarize investors with the educational brochures and other resources that are available on our Web site," said Larry Dyekman, Director of Communications and Education. "We also want to encourage investors to research the registration and regulatory background of futures firms using our BASIC system before making any investment decisions."

Arbitrator Training Programs
Throughout the history of its arbitration program, NFA has conducted arbitrator training programs in various U.S. cities. The most recent programs were held on October 20 in Chicago and October 28 in New York. Members of NFA's arbitration and legal staff led discussions on a variety of dispute resolution topics, including new products, procedural issues and rule changes.

Since 1999, NFA has required mandatory training for its arbitrators. There are three ways to satisfy this requirement-attend an NFA in-person training seminar, attend a training seminar offered by another forum (i.e., NASD, NYSE, AAA), or complete NFA's computer-based training program. NFA's interactive training program, sent to members on a CD-ROM disk, allows arbitrators to learn at their own pace. To complete the training, arbitrators must navigate through the program, complete a quiz at the end of each section and submit a report of their quiz scores to NFA. NFA will not assign arbitrators to a case until they have completed their training requirement.

International Relationships
Beginning on September 11, six representatives from the China Futures Association and the China Securities Regulatory Commission began a two-week training program at NFA. The training program, "Self-Regulation in the Futures Industry - Concepts and Application," was developed and administered by NFA staff. Topics covered in the training included an overview of the U.S. futures industry and its regulatory structure, trade practice and market surveillance, and anti-money laundering.

In mid-October, Senior Vice-President of Strategic Planning and Communications Karen Wuertz attended the annual meeting of the International Organization of Securities Commissions in Seoul, South Korea. Ms. Wuertz participated in a panel discussion on "Combating Financial Crime Globally."

During the week of October 20-24, Ms. Wuertz, Senior Vice-President of Compliance Yvonne Downs and Managing Director of Compliance Regina Thoele gave presentations at the CFTC's 13th annual International Regulatory Symposium in Chicago. Representatives from markets and regulators in Europe, South America, the Middle East, Asia and the European Central Bank discussed issues ranging from how to design futures contracts in order to discourage manipulation to the surveillance of present and future electronic markets. Several symposium attendees also participated in a post-seminar workshop on October 27, where Associate Director of Compliance Patty Cushing and Director of Business Development Derek West briefed the group on NFA's regulatory programs and services.

On October 31, Ms. Wuertz, Ms. Downs and NFA President Dan Roth hosted a delegation from Brazil, consisting of five congressmen, one congresswoman, two senators and several representatives from the Bolsa de Mercadorias & Futuros, a futures exchange in Brazil. The three NFA officers described NFA's self-regulatory structure, as well as the programs and services offered by the Association.

Member Identification Project
In October, NFA launched a new initiative to encourage NFA Members to make their membership more visible to their customers. NFA mailed NFA Member identifier window stickers to all Members along with a letter from NFA President Dan Roth encouraging them to display the sticker in their offices. NFA also offered to provide Members with the NFA logo in a printer-friendly format so Members could add it to their company stationary, business cards, Web sites, etc.

In the letter, Roth writes, "In the 20 years since NFA was founded, trading volume on the U.S. futures exchanges has increased by 400 percent. During the same time period, customer complaints have decreased by more than 70 percent. In the past ten years, the number of firm insolvencies has been cut by 93 percent and customer losses due to insolvency has decreased by 90 percent. These statistics dramatically illustrate not only NFA's commitment to market integrity and investor protection but also the commitment of NFA Members to conduct their business in a way that instills customer confidence in the marketplace."

Members who would like additional stickers should contact NFA's Information Center at 800-621-3570 or information@nfa.futures.org.

Please remember, however, that NFA membership is not an endorsement or approval of a firm's operations, and any mention of membership should not imply such.

SFP Audit Training
NFA is the designated primary regulator for futures firms that offer security futures products (SFPs) to their customers. However, NFA is not the Designated Self-Regulatory Organization (DSRO) for many of these firms and, therefore, does not audit them. To ensure that auditors from other DSROs have a strong working knowledge of SFPs, NFA conducted SFP audit training on September 10 in Chicago.

More than 50 representatives from the Chicago Mercantile Exchange, the Chicago Board of Trade and the New York Mercantile Exchange attended the day-long training program. NFA staff members gave presentations on a variety of SFP audit topics, including registration and proficiency requirements, account openings, suitability, supervision and recordkeeping.