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March 15, 2001
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Futures Industry Best Practices Study Released
Boca Raton, FL - March 15, 2001 - The Futures Industry Institute and National Futures Association today announced the publication of their joint report, “Recommendations for Best Practices in Order Entry and Transmission of Exchange-Traded Futures and Options Transactions.” The recommendations were developed by participants from all sectors of the futures industry in the U.S. and Europe, including representatives from regulatory and exchange authorities, futures commission merchants, market users, technology experts and the legal community. This precedent-setting study, which includes an analysis of each step of the flow of customer orders, was undertaken pursuant to an order of the Commodity Futures Trading Commission with funds allocated from an enforcement action.
The study identifies core principles and best practices in four areas essential to customer protection: intermediary and customer due diligence in trading relationships; account identification, allocation of bunched orders and unusual account activity; give-up transactions; and the use of new technologies in order flow and execution. The project was overseen by three administrators: Peggy Eisen, Chair, FII, and Managing Director, De Guardiola Advisors, Inc.; Susan Phillips, Dean, The George Washington University School of Business and Public Management; and Robert Wilmouth, President, NFA. The administrators issued the following statement:
This study and its far-reaching recommendations for best practices would not have been possible without the widespread participation of all segments of the global futures industry. We hope it will serve as a catalyst for additional best-practices analyses of customer-protection issues in financial markets.
James Newsome, Acting Chairman of the CFTC, said, “This study is a perfect example of how the Commission can partner with industry to develop recommendations. I commend the administrators and all others who contributed to the best practices study for their hard work, and I’m hopeful we can build upon this partnership by utilizing similar processes in the future.”
The report is available on the Web sites of the FII and the NFA, or in hard copy from the Washington, D.C. and Chicago, IL offices of the FII and NFA, respectively.
About Futures Industry Institute
Established in 1989, the Futures Industry Institute (FII) is a nonprofit, industry-sponsored educational foundation. The Institute's mission is to be the primary source of quality, unbiased information, and education about the futures, options and other derivatives industries. All proceeds from FII training and consulting activities and sales of educational materials, after expenses, return to the industry via the development of new materials and programs.
About National Futures Association
National Futures Association (NFA) is a congressionally authorized self-regulatory organization for the U.S. futures industry. Since NFA began operations in 1982, it has been committed to protecting the rights of investors in the futures markets.
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