Member Newsletter

NFA staff members participate in industry conferences
On March 22, Karen Wuertz, senior vice-president of strategic planning, spoke at the International Regulators Conference in Boca Raton, Florida. Ms. Wuertz outlined the efforts of the CFTC and NFA to develop an International Regulators Alert System. The Conference was held in conjunction with the Futures Industry Association's annual Futures Industry Conference.

Ms. Wuertz also led a panel discussion on "Market Integrity in an Electronic Trading Environment" at the Cutting Edge Derivatives Trading Conference in Chicago on April 9. Also on the panel were Chris Concannon, Island Futures Exchange; and Michael Walsh, Environmental Financial Products. At the same conference, NFA's General Counsel Tom Sexton moderated a panel on security futures regulation on April 10. Kathryn Camp, associate general counsel, and Regina Thoele, director of Compliance, also participated in the panel discussion. The conference was presented by Marcus Evans, Inc.

Mr. Sexton also participated in a panel discussion regarding security futures at the annual Public Policy Conference of the North American Securities Administrators Association (NASAA). The Conference was held in Washington, DC, on April 15. Other panelists were Marc Beauchamp (moderator), NASAA; Elizabeth Ritter, CFTC; and T. R. Lazo, SEC.

Dan Driscoll, NFA's senior vice-president and chief compliance officer, participated in a panel discussion titled "Ask Your Regulator" at the OpTech 2002 Conference on April 16 in New York. NFA Chairman Charles Nastro, Lehman Brothers, chaired the panel, which included Mr. Driscoll, John Lawton, CFTC's Division of Trading and Markets, and Eric Wolff, Chicago Mercantile Exchange. The OpTech Conference was sponsored by the Futures Industry Association.

Security Futures Update
NFA continues to work diligently to meet all applicable deadlines and provide assistance to Members so that security futures can begin trading as soon as possible. NFA and NASDR, working with the Institute for Financial Markets, have nearly completed the web-based training program that NFA and NASDR will offer to current registrants free of charge. The two organizations will finalize the program as soon as the SEC and the CFTC issue final regulations on margins and the protection of customer funds.

The risk disclosure statement is in its final drafting stages and is being reviewed by the SEC and CFTC. Once NFA receives comments from the Commissions, staff will meet with the SROs to incorporate those comments and finalize the disclosure statement. NFA will make the statement available through its web site as soon as it is finalized.

NFA has submitted its proposed Compliance Rule 2-37(g) and a related Interpretive Notice relating to fair commissions. It has also submitted an Interpretive Notice to NFA Compliance Rule 2-4 describing a notice-registered broker-dealer's best execution obligation for security futures orders. NFA has since had several conversations with SEC staff, the FIA and the Security Industry Association to meet the best execution requirement in a manner acceptable to both the industry and the two Commissions.

Finally, NFA filed comment letters with the SEC and the CFTC on two joint rule proposals. The first letter supported the Commissions' proposal to apply segregation requirements to security futures transactions in futures accounts and to apply Securities Investor Protection Corporation coverage and the reserve requirement to transactions in securities accounts. The second letter commented on the Commissions' joint margin proposal. The Commissions have as yet not published final rules on either of these issues.

NFA plans 20th anniversary reception
In honor of its 20th anniversary, NFA is planning a reception at the Sewall-Belmont House in Washington, DC, on Thursday, May 16. The reception, scheduled in conjunction with NFA's quarterly Board of Directors meeting, will be held from 6:00 to 8:00 p.m. Futures industry leaders, members of Congress and other friends of the Association have been invited to commemorate NFA's success in safeguarding the integrity of the futures markets for the past two decades.