Member Newsletter

NFA staff speak at enforcement conferences
Assistant General Counsel Ron Hirst was a guest speaker at an attorney/investigator training seminar sponsored by the North American Securities Administrators Association (NASAA). The seminar was held on December 12 and 13 in New Orleans.

Hirst and CFTC Deputy Director of Enforcement Richard Wagner described several enforcement options available in futures-related cases. They also cited examples of past collaborative enforcement actions taken by NFA, the CFTC and state securities agencies.

At another NASAA conference in January, Compliance Associate Director Michael Piracci gave an overview of the off-exchange retail foreign currency (forex) markets, NFA's new rules and the enforcement challenges facing NFA, the CFTC and state enforcement agencies.

NFA begins new series of Member meetings
NFA will begin a new series of "Issues and Answers" Member meetings on Tuesday, February 24, in San Francisco, followed by a meeting in Los Angeles on February 25. There is no charge to attend the meetings, which are scheduled from 2:00 to 4:00 p.m.

"NFA Members responded very positively to the Member meetings we held in 2003," says Larry Dyekman, director of Communications and Education. "Our initial plans are to visit five cities in 2004."

As in the past, Members will have the opportunity when they register for a meeting to indicate the topics they would like NFA staff to address. "We want to make these meetings relevant and meaningful to our Members."

Members who would like to attend either the San Francisco or Los Angeles meeting can register online at www.nfa.futures.org.

NFA's most recent Member meeting was held on November 11 in Fort Lauderdale, Florida. More than 120 individuals attended the meeting, where NFA staff gave presentations on a variety of topics, including CPO/CTA exemptions, NFA audits, anti-money laundering programs and promotional material.

NFA revises SRO study for international regulatory organization
The SRO Consultative Committee of the International Organization of Securities Commissions (IOSCO) has asked NFA to revise a study the Association prepared in 2000 regarding the role of self-regulation in the financial services industry. NFA is a member of IOSCO's SRO Consultative Committee.

"The industry has changed - and continues to change - dramatically," says Senior Vice-President of Strategic Planning and Communications Karen Wuertz, "and we look forward to updating the report to reflect those changes and to highlighting the benefits of effective and efficient self-regulation."

To research the state of self-regulation around the world, NFA sent questionnaires to regulatory organizations in more than 25 countries. The questions covered a variety of topics, including governance, funding and regulatory programs.

Derek West, director of Business Development, presented a summary of the survey's findings at the SRO Consultative Committee's mid-year meeting in London on January 16.

NFA plans to present a report on this subject to IOSCO at their annual meeting in May.

NFA Board affirms NFA contract to provide regulatory services to Eurex U.S.
On October 8, 2003, NFA's Executive Committee authorized staff to execute a Regulatory Services Agreement (RSA) between NFA and U.S. Futures Exchange L.L.C. (Eurex U.S.). At its quarterly meeting in November, NFA's Board of Directors affirmed the Executive Committee's action.

Under the terms of the agreement, NFA will perform trade practice and market surveillance activities for Eurex U.S. As this newsletter was going to press, the CFTC had not yet ruled on Eurex U.S.'s application to become a designated contract market.

In addition to trade practice and market surveillance, NFA will perform background checks, investigate and litigate any disciplinary matters that may arise, perform auditing and financial surveillance functions as the CFTC regulations require and offer its arbitration program for dispute resolution.

Eurex U.S. is the fifth electronic exchange to enter into an RSA with NFA since May 2000.

NFA publishes investor guide to retail off-exchange foreign currency trading
NFA has recently published a guide for investors who are considering trading retail off-exchange foreign currency (forex) contracts. The 24-page booklet presents an overview of the forex markets, how foreign currencies are traded, the risks involved in trading and a trader's rights and obligations. The brochure also contains a glossary of terms and a listing of additional resources.

"A number of firms are presently offering off-exchange forex contracts to the public," says Communications and Education Director Larry Dyekman. "In order for investors to make an informed investment decision, they need to understand the risks associated with this product. That's why we developed this brochure."

The brochure does not suggest that an investor should or should not participate in the forex market. Rather, it should serve as one component of the due diligence process that every investor should undertake before making any investment decision about the off-exchange foreign currency market.

Individual copies of the brochure are available free of charge and can be downloaded from NFA's Web site (www.nfa.futures.org) or ordered from NFA's Information Center (800-621-3570). Quantities of more than five can be purchased for 50 cents each.

NFA to participate in TradersExpo in New York
NFA is sponsoring an information booth at the International TradersExpo to be held on February 15-17 in New York City. The Expo offers educational seminars and workshops as well as an exhibit hall featuring trading software providers, futures and options exchanges and other vendors. In previous years, the Expo has attracted more than 5,000 traders.

NFA staff will distribute copies of the new investor guide to forex trading, as well as other investor education materials, and give demonstrations of NFA's Web-based Background Affiliation Status Information Center (BASIC).