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May 24, 1996
Proposed Amendments to NFA'S Articles of Incorporation
Explanation of Amendments
The number of FCMs in the 1-15 and 16-50 categories has dropped significantly over the years. There were 323 FCMs in the 1-15 category in 1986 compared to 214 today. Even this number is inflated, since 75 FCMs in the 1-15 category paid no assessment fees to NFA last year. The 16-50 category has dropped from 22 to 12 in that same time period. Of the 12 FCMs in the 16-50 category, six paid no assessment fees to NFA. Thus, the number of potential Board members in each of these categories, and particularly in the 16-50 group, is quite limited.
After considering several alternatives to the current structure for these two categories of FCM representatives, the Board determined to increase the number of "at large" representatives from two to four and change the minimum number of directors to be drawn from each of the 16-50 and 1-15 categories to two. This approach provides for at least two representatives from each of the two categories with the remaining four drawn from either. This will provide the Nominating Committee with greater flexibility in selecting candidates.
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 (30 days from date of Notice) in the postage-paid, self-addressed envelope which is also enclosed.
Section 2: Composition of Board.
(b) Futures Commission Merchant, Leverage Transaction Merchant, and Introducing Broker Representatives.
(i) Seventeen (17) elected representatives of registered Futures Commission Merchant (hereinafter "FCM") Members, registered Leverage Transaction Merchant (hereinafter "LTM") Members, and registered Introducing Broker (hereinafter "IB") Members, divided as follows:
(A) [Three] Two representatives of FCMs and LTMs having 1-15 offices.
(B) [Three] Two representatives of FCMs and LTMs having 16-50 offices.
(C) [Two] Four representatives of FCMs and LTMs from either category A or B above.
(D) Six representatives of FCMs and LTMs having 51 or more offices.
(E) One representative of IBs required to maintain minimum adjusted net capital.
(F) One representative of IBs not required to maintain minimum adjusted net capital.
(G) One representative of IBs from either category E or F above.
An FCM and LTM Member's offices shall include the offices of any affiliate through which offices the FCM or LTM Member conducts its FCM or LTM business.
ARTICLE VII, Section 2(b)(i)
(Amendment to change the way FCM seats on the Board are allocated by increasing the number of at-large directors by two and decreasing the number of directors in each of the 16-50 and 1-15 categories by one.)
THIS BALLOT MUST BE HAND-DELIVERED TO NFA OR POSTMARKED NO LATER THAN (30 DAYS FROM DATE OF NOTICE)