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PROPOSED AMENDMENTS
(additions are underscored and deletions are stricken through)

BYLAWS

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BYLAW 301. REQUIREMENTS AND RESTRICTIONS

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(g) Denial and Revocation.

(i) If the President has reason to believe that: (1) an applicant for membership or registration with NFA as an Associate does not meet the qualifications set forth in this Chapter for NFA membership or association with a Member, as the case may be; (2) a Member or registered Associate does not meet the qualifications set forth in this Chapter for continuation as a Member or Associate; or (3) the person has submitted an intentionally incomplete, inaccurate or otherwise false application to NFA for membership or registration as an Associate, the President shall promptly so notify the person in writing and furnish a copy of the notice to the Membership Committee, setting forth the specific grounds for the determination. The person shall be given an opportunity to show to the President that the qualifications are met, or that the application is not intentionally incomplete, inaccurate or false. If the person requests, or if the Membership Committee orders, a hearing shall be held before the Membership Committee or its designated Subcommittee, and a record shall be kept. Such designated Subcommittee shall consist of at least three members of the Membership Committee, at least one of whom shall not be an NFA Member or an Associate or an employee of an NFA Member. At least one-third of the members of the designated Subcommittee shall not be NFA Members or Associates or employees of an NFA Member. Each member of the designated Subcommittee shall be appointed by a majority of the Membership Committee. The person may be represented at the hearing, and submit evidence in the proceeding, call and examine witnesses, examine the evidence upon which the President's determination was based, and, in the discretion of the Membership Committee or its designated Subcommittee, present written or oral argument. No member of the Membership Committee or a designated Subcommittee shall participate in a membership action if the member, or any person with whom the member is connected, has a financial, personal or other direct interest in the matter under consideration or is disqualified under Bylaw 708(c).

(ii) If a hearing before the Membership Committee is held, the Committee or Subcommittee shall make a final, written determination upon the record before it, setting forth the specific grounds for its determination. Such determination shall include the specific grounds for the denial, bar, expulsion or restriction; the findings made concerning those grounds; and an explanation of the result reached in light of the grounds of ineligibility found and the findings made. A copy of the determination shall promptly be sent to the person. If the determination is to deny or revoke membership or registration as an Associate, the Membership Committee or its designated Subcommittee shall, in such written determination, inform the person of the right of such person under the Act to petition the Commission, within 30 days after the denial or revocation, for review of the action under Section 17(h) of the Act and of the right to petition the Commission for a stay of the effective date of such denial or revocation in accordance with Commission Regulations, Part 171.

(iii) (A) The Respondent may appeal any adverse decision of the Membership Committee or Subcommittee issued under Bylaw 301(g)(ii) to the Appeals Committee by filing a written notice of appeal with NFA within 15 days after the date of the decision. The notice must describe those aspects of the membership action to which exception is taken, and must contain any request by the Respondent to present written or oral argument.

(B) The Appeals Committee may also order review of any decision of the Membership Committee or Subcommittee issued under Bylaw 301(g)(ii). If such a review will be conducted, the Appeals Committee will give written notice to the Respondent within 15 days of the date of the decision. Such review may be conducted by the Appeals Committee:

    (1) on its own motion, or

    (2) pursuant to a petition filed by the Registration and Membership Department, the granting of which shall be discretionary with the Appeals Committee. The petition will state why the Registration and Membership Department is seeking review and must contain any request by the Registration and Membership Department to present written or oral argument.

(C) The Respondent's filing of a notice of appeal under paragraph (A) above or the institution by the Appeals Committee of its own review under paragraph (B) above shall operate as a stay of the effective date of the membership order, until the Appeals Committee renders its decision.

(D) No member of the Appeals Committee shall participate in the proceeding if the member participated in any prior stage of the membership proceeding (other than the review of a settlement offer submitted under Registration Rule 509) or if the member, or any person with which the member is connected, has a financial, personal or other direct interest in the matter under consideration or is disqualified under Bylaw 708(c). Except for good cause shown, the appeal or review shall be conducted solely on the record before the Membership Committee or Subcommittee, the written exceptions filed under paragraph (a) above, and such written or oral arguments of the parties as the Appeals Committee may authorize.

(E) If the Appeals Committee authorizes written argument, briefs shall be filed as follows unless otherwise ordered by the Appeals Committee:

    (1) the party required to submit the initial brief shall file it with NFA's Legal Docketing Department and serve it on the other parties to the appeal within 30 days after the Appeals Committee issues an order authorizing written argument;

    (2) the responding party shall file its brief with NFA's Legal Docketing Department and serve it on the other parties to the appeal within 30 days after service of the initial brief;

    (3) the party which filed the initial brief may file an answer to the responding brief with NFA's Legal Docketing Department and serve it on the other parties to the appeal within 10 days after service of the responding party's brief;

    (4) the initial brief or responding brief of any party shall not exceed 35 pages and the answer to the responding brief shall not exceed 10 pages, exclusive of any table of contents, table of cases, index and appendix containing transcripts of testimony, exhibits, rules and regulations; and

    (5) no other written argument on substantive issues raised on appeal will be accepted from the parties or considered by the Appeals Committee.

(F) Promptly after reviewing the matter, the Appeals Committee shall issue a written and dated decision, based on the weight of the evidence. The decision shall include:

    (1) the specific grounds for the denial, bar, expulsion or restriction and its effective date;

    (2) the finding made by the Appeals Committee concerning those grounds;

    (3) an explanation for the results reached in light of the grounds for ineligibility found;

    (4) a statement that any person aggrieved by the membership action may appeal the action pursuant to Commission Regulations, Part 171, within 30 days of service; and

    (5) a statement that any person aggrieved by the membership action may petition the Commission for a stay of the effective date pursuant to Commission Regulations, Part 171, within 10 days of service.

(G) The decision of the Appeals Committee shall be final 30 days after the date of service.

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BYLAW 701. MEMBERSHIP COMMITTEE.

There shall be a Membership Committee, consisting of five Directors and four six other persons, at least one of whom shall not be an NFA Member or an Associate or an employee of an NFA Member. At least one of the Directors shall be a public Director and at least three of the six other persons shall not be an NFA Member or an Associate or an employee of an NFA Member. A majority of the Committee members eligible to participate in a proceeding shall constitute a quorum, except that in cases in which a Subcommittee has been designated a quorum shall consist of a majority of such Subcommittee members but no fewer than three. The Committee members shall be proposed by the President and appointed by the Board. The President and the Board shall endeavor to propose and appoint Directors and persons who reflect the various categories of Members described in the Articles. The Committee or its designated Subcommittee shall review actions taken by the President pursuant to the President's authority under Chapter 3 to make the initial determination regarding: (a) applicants for membership in NFA or registration as Associates, and (b) continued eligibility for such membership or registration. Each Committee member shall serve for two years or until the member's successor is appointed and qualified, or until the member's death, resignation, ineligibility or removal. A Committee vacancy shall be filled in the manner prescribed in Bylaw 601 for officers. A Committee member may be removed by the Board for cause.

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REGISTRATION RULES

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PART 400. PROFICIENCY REQUIREMENTS

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RULE 402. WAIVER OF TESTING REQUIREMENT.

The Vice President of Compliance Registration and Membership may waive the requirements of Rule 401 under circumstances approved by the Board of Directors. The decision of the Vice President of Compliance Registration and Membership shall be final.

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PART 500. PROCEEDINGS TO DENY, CONDITION, SUSPEND AND REVOKE REGISTRATION

RULE 501. AUTHORITY TO DENY, CONDITION, SUSPEND AND REVOKE REGISTRATION.

NFA may refuse to register or register conditionally any person registered or applying for registration as an FCM, IB, CPO, CTA, LTM, ATM, as an AP of any of the foregoing, or as a floor broker or floor trader, or suspend or revoke the registration of any registrant in those categories, based upon the standards of fitness set forth in the Act. Interim Orders and Final Orders denying, revoking, conditioning, or suspending registration shall be made by the Membership Committee or a designated Subcommittee in accordance with the procedures set forth in Part 500 of these Rules. Such designated Subcommittee shall consist of three members of the Membership Committee for all categories except floor brokers and floor traders. The designated Subcommittee for floor brokers/floor traders shall consist of at least three persons, the majority of whom are members of the Membership Committee and the remainder of whom are registered floor brokers or floor traders approved by NFA's Board of Directors to be a member of such Subcommittee. At least one member on each designated Subcommittee shall not be an NFA Member or an Associate or an employee of an NFA Member. At least one-third of the members on each designated Subcommittee shall not be an NFA Member or an Associate or an employee of an NFA Member. In cases submitted by the President to the Membership Committee or a designated Subcommittee, registration shall not be granted pending a final determination by the Membership Committee or a designated Subcommittee. No member of the Membership Committee or a designated Subcommittee shall either review a registration matter or participate in a registration action if the member, or any person with whom the member is connected, has a financial, personal or other direct interest in the matter under consideration or is disqualified under Bylaw 708(c).

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RULE 503. WITHDRAWAL OF APPLICATION FOR REGISTRATION.

(a) Whenever information comes to the attention of NFA that an applicant for registration in any capacity may be disqualified from registration under Section 8a(2), 8a(3) or 8a(4) of the Act, the Vice President of Compliance Registration and Membership or the Vice President's designee may serve written notice upon the applicant which shall specify the statutory disqualifications to which the applicant may be subject and notify the applicant that:

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RULE 504. PROCEDURES GOVERNING APPLICANTS AND REGISTRANTS DISQUALIFIED FROM REGISTRATION UNDER SECTION 8a(2), 8a(3) OR 8a(4) OF THE ACT.

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(c) Reply to Response of a Registrant Subject to an 8a(2) Disqualification. If a registrant who is alleged to be subject to an 8a(2) disqualification submits a written response challenging the accuracy of the allegations establishing the statutory disqualification, the Vice President of Compliance Registration and Membership may submit a written reply to the Membership Committee or a designated Subcommittee and serve such reply upon the registrant within 10 days of the date of such written response. The reply shall include evidence establishing the existence of the statutory disqualification.

(d) Interim Order. After the receipt of a registrant's written response to the Notice of Intent and any reply thereto from the Vice President of Compliance Registration and Membership, the Membership Committee or a designated Subcommittee shall determine whether the registrant is disqualified from registration under Section 8a(2) of the Act.

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    (g) NFA's Witnesses and Evidence. At least 15 days before the date of the hearing the Vice President of Compliance Registration and Membership shall serve on the applicant or registrant a description of the factual issues raised in the applicant's or registrant's response and further submission, if any, that NFA regards as material and disputed. Such reply also shall include the identity and a summary of the expected testimony of each witness whom NFA intends to have testify at its case-in-chief and copies of all documents which NFA intends to introduce at such hearing.

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