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NFA Manual / Rules

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NFA's Functions Explained



FUNDING

The Bylaws of NFA set forth the following funding plan.

Exchanges.

The annual assessment for each exchange member is calculated on the basis of $.005 for each round-turn futures contract traded there. The total of such assessments paid by a contract market Member that had 20 percent of aggregate contract market transaction volume during that fiscal year shall not be more than $150,000 and the total of such assessments paid by a contract market Member that had transaction volume of 20 percent or less of aggregate contract market transaction volume during that fiscal year shall not be more than $100,000. Where "mini contracts" are involved, an adjustment is made to equalize them with the larger-sized contracts in the same commodity (e.g., five 1,000 ounce or bushel contracts will be treated as one 5,000 unit contract, if the latter is traded). Each exchange is free to raise these funds in any manner that it chooses.

FCMs.

The annual assessment for FCMs consists of two elements:

  • Annual dues of $1,500 for exchange Member FCMs and $5,625 for non-exchange Member FCMs.
  • An assessment fee of $.04 for each commodity futures contract (other than an option contract traded on a contract market and a dealer option contract) on a round-turn basis and $.02 for each option contract traded on a contract market on a per-trade basis carried for a customer who is not a member (or an affiliate under common ownership with a member) of the exchange where the trade is made. The assessment must be invoiced to the customer. The collection of this assessment can be suspended or the fee adjusted by the Board for a period not to exceed three months when in the judgment of the Board such action is appropriate in light of NFA's overall financial goals. The assessment fee does not apply to trades that are executed by clearing FCMs for customer omnibus accounts that they carry for non-clearing FCMs, where the non-clearing FCM has already made the assessment. (The non-clearing FCM will make the assessment in this situation because it has the direct relationship with the customer.)

Forex Dealer Members.

Forex Dealer Members (FDMs) pay assessment fees on off-exchange forex transactions. Additionally, Forex Dealer Members pay dues based on their gross annual revenue from retail customers for these activities. Effective April 30, 2006 the dues structure is as follows:

  • If the firm's gross annual revenue from retail forex is $5,000,000 or less, the firm's dues are $125,000 if NFA is responsible for auditing the firm and $25,000 if NFA is not responsible for auditing the firm.
  • If the firm's gross annual revenue from retail forex is more than $5,000,000 but not more than $10,000,000, the firm's dues are $250,000 if NFA is responsible for auditing the firm and $25,000 if NFA is not responsible for auditing the firm.
  • If the firm's gross annual revenue from retail forex is more than $10,000,000 but not more than $25,000,000, the firm's dues are $500,000 if NFA is responsible for auditing the firm and $25,000 if NFA is not responsible for auditing the firm.
  • If the firm's gross annual revenue from retail forex is more than $25,000,000 but not more than $50,000,000 the firm's dues are $750,000 if NFA is responsible for auditing the firm and $25,000 if NFA is not responsible for auditing the firm.
  • If the firm's gross annual revenue from retail forex is more than $50,000,000, the firm's dues are $1,000,000 if NFA is responsible for auditing the firm and $25,000 if NFA is not responsible for auditing the firm.

In addition, FDMs pay a fee of .002 on all order segments processed through NFA's Forex Transaction Reporting Execution Surveillance System (FORTRESS).

Other Members.

Generally, all other Members of NFA are assessed annual dues, as follows:

  • Commodity Pool Operators: $ 750 per year.
  • Commodity Trading Advisors: $ 750 per year.
  • Introducing Brokers (Guaranteed): $ 750 per year.
  • Introducing Brokers (Independent): $ 750 per year.

Provided, however, that any commodity trading advisor, commodity pool operator, or introducing broker that has been approved as a forex firm pursuant to NFA Bylaw 301(j) shall pay $750 plus an additional surcharge of $1,750.

 
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