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December 01, 2014
Request for Public Director Nominations for NFA's Board of Directors
The terms of five of NFA's current Public Representatives - Andrea M. Corcoran, Jim Marshall, Charles P. Nastro, Ronald S. Oppenheimer, and Michael R. Schaefer - are set to expire at the Board of Directors' (Board) 2015 regular annual meeting. Furthermore, in keeping with NFA's policy to have 35 percent of its overall Board composition represented by Public Directors, NFA will be seeking an additional Public Representative.
In defining "Public Representative," Article XVIII states that a Public Representative on NFA's Board is a public director as that term is defined in Section (b)(2) of Core Principle 16 in Appendix B to Part 38 of the CFTC's Regulations and is read in the context as applied to NFA. Therefore, although Core Principle 16 specifically applies to contract markets, the same disqualifying circumstances regarding "material relationships" set forth therein apply to NFA's Public Directors. A printout of that section of the Regulations is attached for your information.
NFA is asking its Members for nominations to fill these six Public Director vacancies on the Board. At the Board's regular annual meeting, scheduled for Thursday, February 19, 2015, the Board will elect from among the nominees six Public Representatives to serve on the Board for two-year terms.
Because public representation on NFA's Board of Directors is an important matter, we ask that you give serious consideration to submitting a nomination to fill these vacancies. NFA requests that Members submit Public Director nominations prior to January 2, 2015 so that NFA's Executive Committee can review the potential nominees at its meeting on January 15, 2015. Nonetheless, all nominations must be received at the address below or by fax or email on or before Tuesday, January 20, 2015.
Thomas W. Sexton
Senior Vice President and General Counsel
National Futures Association
300 South Riverside Plaza
Chicago, IL 60606
Fax Number: 312-781-1467
Email address: Election2015@nfa.futures.org
2) Public Director
(i) To qualify as a public director of a contract market, an individual must first be found, by the board of directors, on the record, to have no material relationship with the contract market. A "material relationship" is one that reasonably could affect the independent judgment or decision making of the director.
(ii) In addition, a director shall be considered to have a "material relationship" with the contract market if any of the following circumstances exist:
(A) The director is an officer or employee of the contract market or an officer or employee of its affiliate. In this context, "affiliate" includes parents or subsidiaries of the contract market or entities that share a common parent with the contract market;
(B) The director is a member of the contract market, or an officer or director of a member. "Member" is defined according to Section 1a(34) of the Commodity Exchange Act and Commission Regulation 1.3(q);
(C) The director, or a firm with which the director is an officer, director, or partner, receives more than $100,000 in combined annual payments from the contract market, or any affiliate of the contract market (as defined in Subsection (2)(ii)(A)), for legal, accounting, or consulting services. Compensation for services as a director of the contract market or as a director of an affiliate of the contract market does not count toward the $100,000 payment limit, nor does deferred compensation for services prior to becoming a director, so long as such compensation is in no way contingent, conditioned, or revocable;
(D) Any of the relationships above apply to a member of the director's "immediate family," i.e., spouse, parents, children and siblings.
(iii) All of the disqualifying circumstances described in Subsection (2)(ii) shall be subject to a one-year look back.
(iv) A contract market's public directors may also serve as directors of the contract market's affiliate (as defined in Subsection (2)(ii)(A)) if they otherwise meet the definition of public director in this section (2).
(v) A contract market shall disclose to the Commission which members of its board are public directors, and the basis for those determinations.