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Trading volume up, customer complaints down over last two decades

When NFA testified recently before the House Financial Services Committee regarding its proposed Anti-Fraud Network Legislation, we provided the Committee with some background information. Among the statistics we cited was the fact that, since NFA began operations in 1982, trading volume has increased by 284 percent while customer complaints have actually dropped by 72 percent. Several members of the Committee found that statistic particularly impressive and asked a number of follow-up questions on how the futures industry achieved that success.

We at NFA feel that the industry as a whole should be very proud of the dramatic reduction in customer complaints that has occurred since NFA began operations. We have compiled a chart that summarizes the number of customer complaints filed in either the NFA arbitration program or the CFTC reparations program during the period from 1982 through 2000. In 1982, before NFA's arbitration program was operating, 1,079 cases were filed with the CFTC. Last year, the combined NFA and CFTC filings were 265. The chart also shows that, although customer complaints have increased in some years and hit a temporary plateau in the mid-1990s, the general trend has been steadily downward.

That trend has continued in the first half of the CFTC's current operational year. In those six months, customer complaints filed with the CFTC and NFA combined totaled 98. If that pace continues, complaints this year will be 26 percent lower than last year's all-time low of 265.

We recognize that there are a number of factors which have contributed to the dramatic drop in customer complaints, but feel that NFA's impact has been an important part of that drop. We also recognize that the challenge to continue these trends is ongoing, and it is incumbent on all of us to pro-actively maintain the integrity of the U.S. futures markets.

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