Investor FAQs

You can visit NFA's Background Affiliation Status Information Center (BASIC) to check if a firm or individual is registered with the CFTC and a Member of NFA. BASIC contains current and historical registration information concerning all current and former CFTC registrants, including name, business address and registration history in the futures industry. If a search results in no registration information, contact NFA's Information Center toll-free at 800-621-3570.

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 or maintain a list of the top FCMs, RFEDs, IBs, CPOs, CTAs, forex dealer members, SDs or MSPs. However, NFA publishes several directories of CFTC Registrants and NFA Members that are available on NFA's website.

To help protect yourself from identity theft, the Federal Trade Commission (FTC) suggests monitoring your accounts, bank statements and your credit report on a regular basis. The FTC also recommends certain steps to take to help you minimize your risk of becoming a victim of identity theft.

Identity theft occurs when an individual uses your personal identification information such as your name, Social Security number or credit card number, to commit fraudulent crimes. The FTC lists the common methods below used by fraudulent individuals to obtain your personal information:

  • Dumpster Diving
  • Skimming
  • Phishing
  • Changing Your Address
  • Old-Fashion Stealing
  • Pretexting

To learn more about these theft methods, visit the FTC's website About Identity Theft section.

If you suspect or know 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 you can take to help you recover from identity theft.

Some characteristics of investment fraud include:

  • The use of high-pressured sales tactics—Some swindlers may result to insulting or arguing with you if they sense you will not be an "easy-sell," shifting to a "hard-sell" approach.
  • A request for credit card information other than to make a purchase—Be careful about providing personal and credit card information for "identification" purposes. Unwanted charges may appear on your credit card bill without your knowledge.
  • An offer that sounds too good to be true—Be wary of investment schemes that promise significant returns. As the age-old saying goes, "If it is too good to be true, then it probably is."
  • A "demand" for an immediate decision—Fraudsters are very persuasive and always have an answer that may sound reasonable to you. Never let a swindler pressure you to make a hasty decision.
  • Ponzi schemes or pyramid schemes:
    A swindler will approach a small number of people to convince them of an investment opportunity. Then the swindler widens his or her net, and uses the money received from a second group of investors to pay large profits to the original group. The original group then circulates their success with other investors, while the swindler continues to collect money, then, abruptly disappears.
  • Internet stock tips:
    Also known as a "pump and dump" scam. Swindlers send spam emails recommending that investors buy specific stock now, while the price is still low. Once investors buy the stock, the stock rises, and so does the price. The swindler will then sell his or her share, leaving investors with worthless stocks.
  • Seasonal trading in gas and oil:
    A broker will claim that there are seasonal tendencies in heating oil or unleaded gasoline and that your chances of making money are increased due to high demand.
  • Affinity fraud:
    Swindlers will target groups with common interests in an effort to increase investors trust. It is important not to let these similarities cloud your judgement.

The Commodity Futures Trading Commission (CFTC) has jurisdiction to regulate the futures markets with oversight over the entire industry. Each U.S. futures exchange operates as a self-regulatory organization governing its floor brokers, traders and member firms. National Futures Association regulates every firm or 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. futures markets. Funds that customers have deposited in an individual account with their futures commission merchant (FCM) to trade on futures exchanges located in the United States are required to be segregated (held separately) from any of the firm's own funds. The amount segregated will increase or diminish as the customer makes or loses money from trading.

Customer funds are not subject to creditor claims against an FCM should it become financially unstable or insolvent, and customer funds can be transferred to another FCM if necessary. Finally, even though an FCM is required to segregate customer funds, customers still may not be able to recover the full amount of any funds in their account if the firm becomes insolvent and there are insufficient funds available to cover the obligations to all of its customers. Customer accounts are not insured. Customers should ask their broker about account protection and should be aware of the limitations imposed on the protection of the funds in their futures 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 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.