In 2000 and 2008, the US Congress passed legislation requiring companies as counterparties of retail foreign exchange transactions, as well as foreign exchange fund pool operators, trading consultants and referral brokers to register with CFTC and become NFA members. The Commodity Exchange Law (CEA) requires some companies and individuals engaged in derivatives industry to register with CFTC. With a few exceptions, CFTC regulations also require CFTC registered companies to be NFA members. CFTC has entrusted the registration responsibility to NFA.
All futures professionals who need to register with CFTC can register only after thoroughly investigating their background to determine whether they meet the applicability standards stipulated by CEA.
The main function of NFA is to make NFA members strictly abide by the federal laws and the rules formulated by CFTC and implement strict management. The NFA also has its own rules to monitor brokers' code of conduct towards traders and investors, so as to prevent traders and investors from cheating.
To become NFA members, futures agents (FCMS), recommendation brokers (IBS), commodity trading consultants (CTAS) and commodity joint venture fund managers (CPOS) can all become NFA members.
Cost-effectiveness Among all the regulatory licenses at present, the NFA(CTP/CPA) dual-qualification license in the United States has the highest cost-effectiveness ratio and the lowest cost, and is the most suitable entry-level license for all small and medium-sized platforms. Materials required for applying for NFA license in the United States:
1, corporate passport
2. Scanned copies of overseas companies
3, the company's development plan for the next three years
4. Resume of legal person
5, bank account running water
6. No proof of criminal record
7. Proof of address of legal person or director
8. Future fiscal and tax plans
It usually takes 2-3 days to provide complete materials. If the materials are missing, they need to be collected and submitted again, which may take a week. If the relevant materials cannot be provided, there will also be a special packaging company to transfer the materials, but the passport of the registrant should be provided.
As we all know, the United States, as a financial power, has very strict supervision over stocks, futures and foreign exchange.
Many brokers want to have NFA licenses to prove their platform strength. However, due to the regulatory requirements of the United States, the leverage of foreign exchange margin business is only 50 times, which makes many American brokers start to suspend their business in their own countries and start to look at the world.
Therefore, American brokers who really have retail foreign exchange rights in the United States have set up offices all over the world, but there are very few foreign exchange brokers who really have NFA supervision. Moreover, because the penalties imposed by NFA are very severe, foreign exchange brokers dare not bully customers easily, so NFA has become a regulatory license that investors particularly pursue.