Notices to Members

December 17, 1999

Proposed Amendments to NFA's Articles of Incorporation

INTRODUCTION

On November 18, 1999, NFA's Board of Directors ("Board') ratified a proposal to amend Article X of NFA's Articles of Incorporation ("Articles") to extend the term of Nominating Committee members from one year to three years and to stagger the terms so that only one-third of the members would be nominated each year.

EXPLANATION OF AMENDMENTS

Article X of NFA's Articles currently states that members of the Nominating Committee "shall serve for a term of one year, or until the Annual Election in which there is at least one position to be filled on the Board in the category of the Subcommittee on which such member serves." The Board determined to amend Article X to lengthen the term of Nominating Committee members to three years and to stagger the terms so that only one-third of the members would be nominated each year. The proposed amendments make the terms of the Nominating Committee members consistent with the terms served by members of the Board and by members of all other NFA standing committees except the Executive Committee. Furthermore, the Board felt that a lengthened term would provide the benefit of giving Nominating Committee members the opportunity to develop more continuity in their working relationships.

PROPOSED AMENDMENTS

The proposed amendments to Article X are set forth below. Additions are underscored and deletions are stricken.

PLEASE NOTE: The Article amendments set forth below require the affirmative vote of two-thirds of those Members actually voting in the Contract Market category and a majority of those Members actually voting in the FCM, LTM and IB category and the Industry Participant (CPO and CTA) category.

Please use the enclosed ballot to vote and submit it to NFA by January 17, 2000.

Section 2: Composition; Term of Members.

(a) Each Subcommittee of the Nominating Committee shall be composed of three representatives of the Subcommittee's category, except that:
(i) The FCM and LTM Subcommittee shall be composed of one representative of FCMs or LTMs with 1-15 offices, one representative of FCMs or LTMs with 16-50 offices, and one representative of FCMs or LTMs with 51 or more offices; and

(ii) The IB Subcommittee shall be composed of three representatives, including at least one representative of IBs required to maintain minimum adjusted net capital and at least one representative of IBs not required to maintain minimum adjusted net capital.

(b) Each member Members of the Nominating Committee shall serve for a staggered terms of three years from the date of the Annual Election at which they are elected until the date of the Annual Election three years hence at which their successor is elected. one year, or until the Annual Election in which there is at least one position to be filled on the Board in the category of the Subcommittee on which such member serves.

Section 3: Selection of Committee Members.

Each Subcommittee of the Nominating Committee shall nominate, for each position to be filled on the Nominating Committee, one eligible individual for election by the Members to that Subcommittee for the following term. Additional nominations may be made for each such position by petition in the manner set forth in Article VII, Section 3. The procedures for such election shall be the same as those prescribed in Article VII, Section 3. No person shall be nominated or elected to the Nominating Committee who has served on the Nominating Committee during any of the preceding three terms term, and no person shall be nominated or elected to the Nominating Committee who, at the time of such nomination or election, is a Director. Any vacancy that occurs on the Nominating Committee shall be filled by the Board from among persons eligible under this Article to serve thereon.