eurex us and nfa sign regulatory services agreement chicago 05 november 2003
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Eurex US and NFA sign Regulatory Services Agreement Chicago 05 November 2003. Rudolf FerschaPeter Reitz CEO, Eurex Member of the Executive Board, Eurex. NFA to provide Surveillance Services to Eurex US. - PowerPoint PPT PresentationTRANSCRIPT
Eurex US and NFA signRegulatory Services Agreement
Chicago05 November 2003
Rudolf Ferscha Peter ReitzCEO, Eurex Member of the Executive Board, Eurex
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NFA to provide Surveillance Services to Eurex US
Eurex US and the National Futures Association (NFA) have finalized and signed a regulatory services contract
Eurex to obtain regulatory services from leading U.S. provider
Initial term of the contract is 3 years with automatic one year renewals
NFA is Eurex US‘s preferred choice to ensure that customers are protected market conditions are fair and orderly at all times
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About National Futures Association
Mission is to provide innovative regulatory programs and services that ensure futures industry integrity, protect market participants and help its Members meet their regulatory responsibilities.
Members of NFA include all US FCMs, Introducing Brokers, Commidity Trading Advisers and others
Unique Self-Regulatory U.S. Registered Association of U.S. futures professionals
Commenced operations in 1982 as a non-profit,self-regulatory organization for the derivatives markets
Based in Chicago with over 200 employees A 25-member Board of Directors includes senior
representatives from financial institutions, US Futures exchanges as well as Public Representatives
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National Futures Association’s Role
Major functions as Registered Futures Association– Enforces rules for customer protection– Conducts arbitration of futures-related disputes– Screens fitness to be a NFA member
NFA also performs functions on behalf of the CFTC– Processes registrations with the CFTC– Screens applicants for registration– Grants floor broker and floor trader registrations for CFTC– Reviews Commodity Pool Disclosure Documents
Premier independent provider of efficient and innovative regulatory programs that safeguard the integrity of the derivatives markets
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NFAs Services for Eurex US
Trade Practice Surveillance – Trade Practice Surveillance ensures that customer orders are
treated fairly and that all Members follow exchange trading rules
– Specifically, trade practice surveillance seeks to identify suspicious or illegal trading activities
Market Surveillance– Market surveillance ensures that futures markets are free of
manipulative trading, price distortions or market congestion
– Markets that accurately reflect underlying cash prices provide hedging and price discovery vehicles that benefit producers and consumers
Membership Background Checks– NFA will assist Eurex US in checking on the background of
potential members, helping to ensure that members meet appropriate eligibility standards
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Specific Activities subject to trade practice surveillance
Trading ahead of the customer/Front running Direct/Indirect crossing (Indirect) Taking the other side of a customer order Wash trading Pre-arranged trading Money passing Stop order fishing Marking the close Irregular error account activity Transfer trades Off-order book trades
Trading surrounding market events
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Specific Activities Subject to Market Surveillance
Total open interest Spread differential between months Spread differential between markets Concentration of open interest Basis to underlying cash market Deliveries Large trader position tracking
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Specific Membership Background Checks
Credit checks on firms that want to become members of the Exchange
Disciplinary background checks
Ongoing financial viability checks of member firms through auditing financial statements
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NFA is an independent, highly qualified authority
Eurex US chose the National Futures Association to oversee our markets because:
NFA is an independent, non-profit organization NFA operates without bias towards any
exchange member NFA is a highly qualified, well-respected
self-regulatory authority
NFA is based in Chicago with a staff of over 200 employees
Eurex US is committed to markets where customers are protected