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NFA budgets 3.9 percent spending increase for new fiscal year

NFA's FY 2005 budget calls for an increase its spending of 3.9 percent over projected FY 2004 expenses. The increase is slightly higher than the Association's ten-year average increase of just under two percent. NFA's Board of Directors approved the $33.4 million budget at a meeting on May 20 in New York. NFA's fiscal year runs from July 1 through June 30.

"Increased regulatory activities and higher health care cost were the primary drivers of this year's increase," says NFA Treasurer David Hawrysz.

NFA anticipates hiring additional staff in FY2005, primarily in the Compliance Department, to fulfill regulatory responsibilities associated with anti-money laundering (AML) and off-exchange foreign currency (forex) trading.

Health care costs continue to constitute a significant portion of employee benefits expenses. This year NFA has asked its employees to shoulder a larger portion of overall healthcare costs to mitigate the financial impact on NFA. "It's a delicate balance", says Hawrysz. "On one hand the organization can not absorb the entire premium increase; on the other hand we need to ensure we stay competitive by being able to attract quality employees by offering a competitive benefits package".

Revenue is budgeted at $27.3 million, a decrease of 9 percent compared to Fiscal 2004. The decrease in revenue is the result of the Board's decision to lower membership dues effective July 1, 2004 and reduce assessment fees effective January 1, 2005.

"Public trading volume on the U.S. futures exchanges increased over 25 percent in Fiscal 2004," says Hawrysz. "This tremendous growth enables us to reduce the cost of dues and fees to our membership without sacrificing the high quality of our programs and services."

Hawrysz points out that NFA will be operating at an intentional deficit in FY2005. The action is part of NFA's strategic plan to reduce its working capital to the level recommended by the Board of Directors.

"Like every other organization, NFA faces many challenges while preparing the budget," says Hawrysz. "At NFA, our goal is to be as cost efficient as possible while still delivering the best regulatory programs and services."

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