Notices to Members

October 6, 2020

Effective dates of amendments to NFA's Code of Arbitration and Member Arbitration Rules

NFA recently amended its Code of Arbitration (Code) and Member Arbitration Rules (Member Rules). The rule changes and their effective dates are summarized below.

Increased filing and hearing fees and restructured claim tiers

The Code and the Member Rules require each party filing an arbitration claim to pay filing and hearing fees. These fees increase as the claim amount increases. NFA made adjustments to the fees and amended the fee structure to reflect increased claim amounts in recent years. Though NFA will continue to subsidize its Customer Arbitration Program, the fee increases will allow NFA to offset more of the costs associated with administering arbitration claims. These fee increases will also allow NFA to increase the honorarium paid to arbitrators in order to continue to attract high quality arbitrators.

The fee increases and the restructured claim tiers are effective for any case filed on or after October 6, 2020.

Additional flexibility for parties that filed claims involving Member respondents that withdraw their membership

NFA amended the Code and Member Rules to make it easier for a party to withdraw or amend its claim or ask for a hearing or summary postponement if the Member respondent withdraws its membership during the course of the proceeding. NFA also amended its Member Rules to make claims against a former Member voluntary, rather than mandatory. These amendments become effective for all cases pending on or after October 6, 2020.

Additional flexibility governing service of process and the time and place of hearings

NFA amended its Code and Member Rules to permit service by e-mail without the need for express consent. NFA also amended the Code and Member Rules to make clear that, in extraordinary circumstances, an Arbitration Panel may order the parties to conduct hearing sessions on a virtual basis when an in-person hearing is not feasible. The changes to NFA's rules regarding service by e-mail and a Panel's ability to order a virtual hearing become effective for all cases pending on or after October 6, 2020.

NFA's FCM, IB and CPO/CTA Advisory Committees fully supported the proposed amendments. In particular, the Advisory Committees expressed overwhelming support for the increase to the arbitration fees and viewed them as reasonable in light of the fact that the filing fees have remained virtually unchanged since each program's inception.

NFA's September 22, 2020 submission letter to the CFTC contains more detailed information regarding these amendments to the Code and Member Rules. If you have any questions regarding these amendments, please contact Heather Cook, Manager, Arbitration (hcook@nfa.futures.org or 312-781-1481).