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Articles of Incorporation



ARTICLE III: PURPOSES
[Effective dates of amendments: April 14, 1983; January 1, 1990; April 23, 2001; and April 1, 2013.]

Section 1: Fundamental Purposes.

Subject to the limitations in Section 2 of this Article, the fundamental purposes of NFA are to promote the improvement of business conditions and the common business interests of persons engaged in commodity futures and swaps or related activity by

    (i) undertaking the regulation of persons that are members of NFA (hereinafter "Members") as set forth in this Article;

    (ii) relieving the Commodity Futures Trading Commission (hereinafter "Commission") from the substantial burden of direct regulation in such matters; and

    (iii) providing such regulatory services to such markets as the Board may from time to time approve. Actions of NFA to effectuate these purposes may include:

    (a) Public Interest.

    The adoption, administration and enforcement as to the following persons of requirements regarding fair practice and designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade and, in general, to protect the public interest

      (i) Members that are registered with the Commission as Futures Commission Merchants, Commodity Pool Operators, Commodity Trading Advisors, Introducing Brokers, Leverage Transaction Merchants, Retail Foreign Exchange Dealers, Swap Dealers or Major Swap Participants; and

      (ii) Associates (See Article XVIII).

    (b) Financial Standards.

    Notwithstanding the provisions of Section 2(a) of this Article, the adoption with respect to its Members that are Futures Commission Merchants, Introducing Brokers, Leverage Transaction Merchants, Retail Foreign Exchange Dealers, Swap Dealers or Major Swap Participants of financial and related requirements designed to protect against insolvency, bankruptcy, or unsafe or unsound financial condition of such Members; the conduct, directly or through agents, of audits and reviews of the financial condition and related matters of such Members; and the adjudication and enforcement of compliance with NFA's financial and related requirements for all such Members, except as may otherwise be provided under Commission Regulations: Provided, however, it is expressly understood that Contract Markets and clearing organizations shall have the right to adopt, administer and enforce financial and related requirements governing the eligibility of Members for membership privileges on such Contract Markets or clearing organizations.

    (c) Arbitration.

    The adoption and administration of a fair and equitable procedure through arbitration or otherwise for the voluntary settlement of customers' claims or grievances against Members described in paragraph (a) above, their employees, and Associates, in accordance with Section 17(b)(10) of the Commodity Exchange Act (hereinafter the "Act"), or claims or grievances of such Members or Associates against customers, or claims or grievances between or among such Members or Associates: Provided, however, no such procedure shall apply to the settlement of a claim or grievance where the parties, by valid and binding agreement, have committed themselves to the resolution of such claim or grievance in a forum other than NFA, or where parties having claims or grievances between or among themselves are required by Contract Market rules to submit the controversy to the settlement procedures of such Contract Market.

    (d) Qualifications Standards.

    The adoption of appropriate standards with respect to such training, experience and other qualification requirements as NFA deems necessary and appropriate to insure the fitness of Members and Associates; the development and administration of written proficiency examinations of Members and Associates; and, with the approval of the Commission, the administration of the registration of Members, Associates and any other persons required to be registered with the Commission. Such requirements, examinations and registrations adopted by NFA with respect to Associates shall, with the consent of each Contract Market Member conducting comparable activities, replace and supplant the requirements, examinations and related activities theretofore conducted with respect to Associates by the Contract Market Member.

    (e) Protection of Customers.

    Notwithstanding the provisions of Section 2(a) of this Article, the adoption, administration and enforcement of uniform, industry-wide requirements regarding the dealings and relations between and among Members described in paragraph (a) above, Associates and the customers of such Members and Associates, including, without limitation, requirements governing the manner, method, and place of soliciting business, including the content of such solicitations and the form and manner of handling, recording, and accounting for customers' orders, transactions, and accounts.

    (f) Doing Business With Non-Members.

    The prohibition of Members from carrying accounts, accepting orders, or handling transactions, in commodity futures contracts, for or on behalf of any non-Member, or suspended Member, that is required to be registered with the Commission as a Futures Commission Merchant, Commodity Pool Operator, Commodity Trading Advisor, Introducing Broker or Leverage Transaction Merchant and that is acting in respect to the account, order, or transaction for a customer, a commodity pool or participant therein, a client of a commodity trading advisor, or any other person, unless

      (i) such non-Member is a member of another futures association registered under Section 17 of the Act or is exempted from this prohibition by the Board or

      (ii) such suspended Member is exempted from this prohibition by the Board or a committee thereof.

    The prohibition of Members from accepting orders in commodity futures contracts to cover leverage transactions, for or on behalf of any non-Member, or suspended Member that is required to be registered with the Commission as a Leverage Transaction Merchant, unless

      (i) such non-Member is a member of another futures association registered under Section 17 of the Act or is exempted from this prohibition by the Board or

      (ii) such suspended Member is exempted from this prohibition by the Board or a committee thereof.

    (g) Corporate Powers.

    The purchase or other acquisition, and the holding, owning, maintaining, working, developing, selling, leasing, exchanging, hiring, conveying, mortgaging or otherwise disposing of and dealing in, lands and leaseholds, and any interest, estate and rights in personal property, and any personal or mixed property, and any franchises, rights, licenses or privileges necessary, convenient or appropriate for any of the purposes herein expressed; the borrowing of funds for NFA's purposes and the pledging of real, personal or mixed property in connection therewith; the institution and defense of suits in NFA's name, and the settlement or compromising of any claim or controversy by or against it; and, subject to the delineation of purposes recited herein and the limitations set forth in Section 2 of this Article, the carrying out of all and everything necessary, suitable or proper for the accomplishment of any of the purposes, or the attainment of any of the objects, or the furtherance of any of the powers hereinabove set forth, and the performance of every other act or acts incident or appurtenant to, or growing out of, or connected with the aforesaid business or powers, or any part or parts thereof, and the exercise of all or any of its corporate powers or rights in the State of Delaware and in the various other states, territories, and dependencies of the United States, in the District of Columbia and in all or any foreign countries.

Section 2: Contract Markets.

    (a) Non-applicability of NFA Rules.

    No NFA requirement shall purport to govern or otherwise regulate the specific conduct of a Member or Associate if such conduct is governed or regulated by the requirements of a Contract Market and such Member or Associate is subject to the Contract Market's disciplinary jurisdiction for such conduct.

    (b) Prohibition Upon Adoption of Certain Rules.

    NFA shall not adopt, administer or enforce upon any Member or Associate a rule, standard, requirement or procedure which purports to govern or otherwise regulate any of the following:

      (i) The minimum level or margin required for any futures or swaps contract or type of futures or swaps transaction, the method for calculation thereof, or compliance therewith, unless such rule, standard, requirement or procedure conforms and is not inconsistent with applicable Contract Market requirements.

      (ii) Eligibility for membership in, clearing privileges on, or service on the governing board or committees of, a Contract Market.

      (iii) The rights, privileges, duties or responsibilities of membership in any Contract Market or clearing organization.

      (iv) The content, interpretation, administration or enforcement of any rule, standard, requirement or procedure of a Contract Market or clearing organization.

      (v) The conduct of business or other activities on the trading floor of a Contract Market.

      (vi) The terms or conditions of any futures contract.

      (vii) The terms or conditions of any swaps contract; provided that such terms or conditions conform to and are not inconsistent with applicable Contract Market requirements.

Section 3: Communications With Legislative Bodies.

NFA shall not communicate any statement as its official position, view or opinion to a legislative body on any matter pending or contemplated to be pending before such body, except with the prior approval of the Board.

 
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