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ARTICLES OF INCORPORATION
(Additions are underscored and deletions are stricken)
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Article IV: Form Of OrganizationNFA shall be a membership corporation and shall have no capital stock and shall have no authority to issue any stock. NFA is not organized and shall not be conducted for profit, and no part of its net revenues or earnings shall inure to the benefit of any Member except for the repayment of bona fide loans or other credit extended by a Member to NFA.
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Article VII: Board Of DirectorsSection 1: General.
The duties of the Board of Directors shall include the management of NFA's business, the adoption of NFA's Bylaws, and the fulfillment of NFA's fundamental purposes.
Section 2: Composition of Board.
The Board of Directors shall be comprised as follows:
(a) Contract Market Representatives.
(ii) Two (2) elected representatives of contract market Members not ranked in the top four contract market Members based on annual transaction volume during the prior calendar year. Only contract market Members not represented in accordance with Section 2(a)(i) shall be eligible to vote for the representatives elected in accordance with this Section 2(a)(ii).
(iii) A specific contract market's annual transaction volume shall be the number of commodity futures contracts entered into on the contract market during the calendar year.
(iv) A contract market Member and all contract market Members with which it is affiliated shall have no more than one representative on the Board at any one time. For the purposes of this limitation, a contract market Member shall be deemed to be affiliated with another contract market Member if it directly or indirectly owns 100 percent of or is owned 100 percent by or has 100 percent ownership in common with such other contract market Member.
(b) Futures Commission Merchant, Leverage Transaction Merchant and Introducing Broker Representatives.
(C) Five representatives of FCMs and LTMs having 51 or more offices.
(D) Five representatives of FCMs and LTMs from category A, B or C above.
(G) One representative of IBs from either category E or F above.
An FCM and an 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.
(ii) No FCM, LTM or IB shall have more than one representative on the Board at any one time. For purposes of this limitation, a person shall be deemed a representative of an FCM, LTM or IB Member if the person is an officer, director, partner, employee or beneficial owner of more than 10 percent of the equity stock of the FCM, LTM or IB, and the person is not a contract market representative.
Section 3: Nominations; Election.
The elected Directors shall be chosen as follows:
(a) Nominating Committee.
The Nominating Committee (see Article X) shall nominate at least one candidate for each elected FCM and LTM, IB, and CPO and CTA Director position to be filled
(b) Petition Procedure.
Nominations may be made for elected FCM and LTM, IB, and CPO and CTA Director positions by:
(i) Petition signed by 50 or more NFA Members in the category for which the nomination is made (i.e., FCM and LTM, IB, and CPO and CTA); or
(ii) Petition submitted by any organization or association recognized by NFA as fairly representing the category (See (b)(i) above) for which the nomination is made.
Petitions shall be submitted in the manner specified in the Bylaws. No petition may nominate more than one candidate for the same position.
If there is a contested election in any category (See (b)(i) above) of NFA Members, the Members in that category shall thereafter elect by plurality vote from such nominees the Directors that are to represent that category. The election shall be conducted in the manner provided in the Bylaws, which shall provide for an Annual Election.
(d) Public Representatives.
The Public Representatives shall be chosen as follows: Before the Annual Election, the Board shall solicit from the Members the nomination of individuals to serve on the Board in the Public Representative category. At the Board's regular annual meeting, the Board shall, by majority vote, select from among such nominees the Public Representatives to serve on the Board.
(e) Contract Markets
The contract market representatives described in Article VII, Section 2(a)(ii) shall be elected as follows: Before the Annual Election, the Board shall solicit from contract market Members described in Article VII, Section 2(a)(ii) the nomination of individuals to serve on the Board as representatives of such contract market Members. If there is a contested election of such contract market Members, such contract market Members shall thereafter elect by plurality vote from such nominees the Directors that will represent them. The election shall be conducted in the manner provided in the Bylaws, which shall provide for an Annual Election.
Section 4: Terms of Directors.
(a) Contract Market Directors.
(b) Other Directors.
Directors other than
Section 5: Voting; Quorum.
Each Director shall have one vote upon any matter coming before the Board for official action, and, except as otherwise provided in these Articles or NFA's Bylaws, the affirmative vote of a majority of the Directors present and voting at a meeting of the Board shall be NFA's official act if a quorum is present. A quorum of the Board shall consist of one-half of the Directors, except where NFA Bylaws specify a lesser number in emergency situations.
Section 6: Establishment of Major Plans and Priorities.
The Board shall establish for observance by the Executive Committee (See Article VIII) and NFA staff major plans and priorities, including those regarding the commitment and expenditure of NFA funds.
Section 7: Chairman and Vice Chairman.
There shall be a Chairman and Vice Chairman of the Board. They shall serve for one-year terms and shall be elected by the Board at its regular annual meeting, by majority vote. The Chairman shall be elected from among the Directors in office and the Vice Chairman shall be elected from among Directors elected to serve on the Executive Committee.
Section 8: Vacancies.
A vacancy that occurs on the Board before the expiration of a Director's term shall be filled (for the unexpired term) by an eligible individual elected by majority vote of the remaining Directors who represent the category of Members in which the vacancy occurred, except that if the vacancy involves a representative of a contract market Member described in Article VII, Section 2(a)(i), that contract market Member shall designate the successor. In the event there are no Directors remaining who represent the category of Members in which the vacancy occurred, the vacancy shall be filled by an eligible individual elected by the Board.
Article VIII: Executive CommitteeSection 1: General.
There shall be an Executive Committee of the Board, which may exercise all powers of the Board except as set forth in Section 2 below. The authorized actions of the Executive Committee shall be deemed actions of the Board.
Section 2: Board Powers Not Exercisable By Executive Committee.
(a) General Prohibitions.
The Executive Committee shall not exercise any power of the Board when the Board is in session, and the Executive Committee shall at no time take any action with respect to any matter that is the subject of a notice of a pending Board meeting without the concurrence of the Board.
(b) Specific Prohibitions.
The Executive Committee shall at no time exercise any of the following powers of the Board:
(i) The adoption, amendment or repeal of any Bylaw unless such power has been delegated by the Board in accordance with Article XI, Section 1(a); or the ratification of any proposal to adopt, amend or repeal these Articles.
(ii) The establishment of major plans and priorities, including those regarding the commitment and expenditure of NFA funds, except that the Board may authorize the Executive Committee to make expenditures within specific monetary limits prescribed in the Bylaws or Board Resolutions.
(iii) The election, appointment or removal of any NFA Director, officer or committee member.
(iv) The adoption of a plan of merger or consolidation with another entity.
(v) The sale, lease, exchange or mortgage of all or substantially all of NFA property or assets.
(vi) The voluntary dissolution of NFA or the revocation of proceedings therefor.
(vii) The adoption of a plan for the distribution of NFA assets.
(viii) The amendment or repeal of any Board Resolution that, by its terms, provides that it shall not be amended or repealed by the Executive Committee.
Section 3: Composition.
The Executive Committee shall comprise the following:
(a) NFA's President, and
(b) Nine (9) Directors, as follows:
(i) The Chairman of the Board of Directors, and
(ii) Eight (8) other Directors, as follows:
(A) Two (2) Directors representing contract markets:
(1) One (1) representative of a contract market
(2) One (1) representative of a contract market other than a contract market described in clause (1) above:
(B) Three (3) Directors representing FCMs, LTMs or IBs;
(C) Two (2) Directors representing CPOs and CTAs; and
(D) One (1) Director who is a Public Representative
Section 4: Election of Members; Vacancies.
The elected members of the Executive Committee shall be chosen by the Board at the regular annual meeting as follows: The Directors representing contract markets
Section 5: Voting; Quorum.
Each member of the Executive Committee shall have one vote on Executive Committee matters. A quorum of the Committee shall consist of one contract market Member of the Committee, one FCM, LTM or IB member of the Committee, and any three other Committee members.
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Article X: Nominating CommitteeThere shall be a Nominating Committee, composed of three Subcommittees, one for each of the following categories of Members: FCMs and LTMs, IBs, and CPOs and CTAs. Each Subcommittee shall nominate at least one candidate for each position to be filled on the Board in the Subcommittee's category, in accordance with the eligibility requirements of Article VII.
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 three representatives, including at least one representative of FCMs or LTMs
(ii) The IB Subcommittee shall be composed of three (3) 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.
(iii) The CPO and CTA Subcommittee shall include at least one representative that primarily acts as a CPO and at least one representative that primarily acts as a CTA.
(b) Members of the Nominating Committee shall serve staggered terms of three years from the date of the Board’s regular annual meeting following the Annual Election at which they are elected until the date of the
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 the preceding 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.
Article XI: BylawsSection 1: Adoption, Amendment and Repeal.
Bylaws of NFA may be adopted, amended or repealed by a majority of all Directors in office at the time, except that
(a) Category Voting.
Tthe Board shall not take the following actions unless a two-thirds majority of all Directors present and voting
(i) Delegating or otherwise granting authority to any NFA Committee, officer, employee or agent, or any other person, to adopt, amend or repeal any Bylaw.
(ii) Adopting, amending or repealing any Bylaw regarding dues or assessments; and
(b) Contract Market Dues and Assessments.
(iii) Adopting, amending or repealing any
Section 2: Content of Bylaws.
Except insofar as such matters are expressly contained in these Articles, the following shall be as provided from time to time in NFA's Bylaws: The conditions of, method of admission to, and qualifications for membership and Associate registration; the limitations, rights, powers and duties of Members and Associates; dues and assessments; the method of expulsion from and the termination of membership and Associate registration; the procedures for the settlement of claims and grievances; and all other matters pertaining to membership in, registration with, and the conduct, management and control of the business, property and affairs of NFA.
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Article XVII: Adoption, Amendment and Repeal of ArticlesNo provision of these Articles may be adopted, amended or repealed except in the manner prescribed in this Article. Each such proposed change to the Articles shall be reviewed by the Board, and shall be submitted to the Members of NFA only upon ratification of the proposal by two-thirds of the Directors.
Article XVIII: Definitions.
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(h) "Contract Market"-means an exchange designated by the Commission as a derivatives transaction execution facility or registered by the Commission as a contract market.
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