Rules and Regulations
Regulatory Framework
The Commodity Exchange Act governs futures trading, and the CFTC administers it. The NFA enforces membership and sales-practice rules. Registration categories include FCM, IB, AP, CTA, and CPO. Firms must supervise employees, avoid fraudulent or misleading sales practices, maintain records, and protect customer funds. Position limits and large-trader reporting help monitor concentration and market integrity.
Customer disputes may go to NFA arbitration or CFTC reparations, depending on the forum and claim. Promotional material must be fair and not misleading. Anti-money-laundering procedures and know-your-customer requirements apply. Guaranteed accounts and associated persons have special supervisory rules.
Traps
The CFTC is a government regulator; the NFA is a self-regulatory organization. Arbitration and reparations are different dispute processes. Registration does not permit commingling customer funds with firm funds. Fraud includes misrepresentation, omission of material facts, and unauthorized trading. Exemptive or excluded status is narrow; do not assume it applies broadly.
Rule of Thumb
If a person solicits futures business or manages customer futures accounts for compensation, assume registration is required unless a specific exemption applies. Keep customer funds segregated and promotional claims supportable.