Visit BASIC to get important background information about firms and industry professionals in the derivatives industry.
To conduct a background check of your broker or firm, visit NFA's Background Affiliation Status Information Center (BASIC). BASIC provides information concerning disciplinary actions taken by NFA, the CFTC and all the U.S. futures exchanges. If you are researching a firm, you should also conduct a background check of all the individuals listed as principals of the firm. Sometimes the firm will have no disciplinary history, but one or more of the principals may have been disciplined while working at other firms.
NFA does not rank its Members. However, NFA publishes CFTC Registrant and NFA Member directories.
The Federal Trade Commission (FTC) provides a number of resources to help investors protect themselves from identity theft.
Identity theft occurs when an individual uses personally identifiable information (PII) such as names, personal records, Social Security or credit card numbers to commit fraudulent crimes. The FTC maintains a list of warning signs of identity theft that fraudulent individuals use to obtain PII.
If you suspect that your personal information has been stolen, the FTC recommends that you contact your local police and notify your creditors immediately. The FTC also suggests steps for recovering from identity theft.
Read NFA's Scams and Swindles brochure to learn about the characteristics of investment fraud and the steps investors can take to protect themselves.
The CFTC has jurisdiction to regulate the derivatives market with industry oversight. Each U.S. futures exchange operates as a self-regulatory organization, governing its floor brokers, traders and member firms. NFA regulates every firm and individual that conducts futures trading business with the investing public.
Government regulations require the strict handling of customer funds used to participate in U.S. derivatives market. Customer funds that are deposited in an individual account with their FCM to trade on U.S. futures exchanges are required to be segregated from the firm's own funds. The amount segregated will increase or diminish as the customer makes or loses money.
Customer funds are not subject to creditor claims against an FCM should it become financially unstable or insolvent. Customer funds can be transferred to another FCM if necessary. It is important to remember that even though an FCM is required to segregate customer funds, customers may not be able to recover the entirety of funds in their account if the firm becomes insolvent and there are insufficient funds available to cover its customer obligations. Additionally, customer accounts are not insured and customers should ask their broker about account protection and should be aware of the limitations imposed on the protection of the funds in their trading accounts.
On-exchange trading is the trading of commodities and contracts that are listed on an exchange. Off-exchange trading, also known as over-the-counter (OTC) trading, is the trading of commodities, contracts or other financial instruments that are not listed on-exchange. Off-exchange trading can occur electronically or over the phone. Some foreign currency (forex) contracts are traded off-exchange.