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May 28, 2015

NFA's Board approves Fiscal Year 2016 budget

On May 21, NFA's Board of Directors approved a budget of $85 million for Fiscal Year 2016. The FY 2016 budget reflects a 7.7 percent increase over projected FY 2015 operating expenses. A major influence that accounts for more than 60 percent of the increase is the continued expansion of  NFA's swaps regulatory programs ($2.5 million) and the growth in NFA's technology staffing ($1.2 million). NFA's fiscal year runs from July 1 through June 30.

In Fiscal 2016, staffing for NFA's swaps regulatory programs for swap dealers (SDs) and major swaps participants (MSPs) is budgeted to increase by close to 20 resulting in an average headcount of 100. While most of NFA's efforts have largely centered on the review of the 4s submissions, NFA began performing on-site examinations of SDs this fiscal year and will perform more on-site exams in the coming year. NFA will also continue to develop its internal risk profiling system and monitoring program for SDs and MSPs.

NFA operates on the premise that each regulatory program (futures, swaps, off-exchange retail forex and market regulation) should be financially self-sufficient, and that each program should generate enough revenue to recover the costs associated with operating their respective programs.

Another major factor contributing to the budget increase is additional staffing for NFA's Information Systems department. These resources are needed to support cybersecurity initiatives, rebuild large critical systems — such as NFA's Online Registration System — and focus on new system developments in the swaps area.

"Cyber threats are constantly evolving and increasing both in terms of complexity and intensity and serve as a daily reminder of the importance of effective cybersecurity," said Timothy McHenry, vice president, Information Systems.

NFA has and will continue to make the necessary investments in hardware, software and personnel to maintain an effective information systems security program.

NFA is the premier independent provider of efficient and innovative regulatory programs that safeguard the integrity of the derivatives markets.
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