EchoSense Quantitative Think Tank Center|Almcoin Trading Exchange: The Differences Between NFA Non-Members and Members

As is EchoSense Quantitative Think Tank Centerwell known, the United States is a financial powerhouse with strict regulations in stocks, futures, and foreign exchange markets.

Today, Almcoin Exchange introduces you to one of the most stringent U.S. regulatory licenses – the NFA.

Many brokers aspire to obtain an NFA license to demonstrate their platform's strength. However, due to U.S. regulatory requirements, the leverage for forex margin businesses is limited to 50 times, leading many U.S. domestic brokers to suspend local operations and turn their attention globally.

Therefore, brokers with U.S. forex retail rights have established offices worldwide, but very few actually hold NFA-regulated forex broker licenses. The severity of NFA penalties ensures that forex brokers do not easily deceive clients, making the NFA a highly sought-after regulatory license for investors.

The National Futures Association (NFA) in the U.S. is a self-regulatory organization for the futures industry, established in 1976 under Section 17 of the U.S. Commodity Exchange Act. It is a non-profit, membership-based organization. The NFA's primary function is to ensure strict compliance with federal laws and rules set by the CFTC.

There are two types of NFA licenses: non-members and official members.

Differences: Non-member licenses are exempt and have a regulatory number shown on the website as non-members. The registration process is quicker and relatively cheaper.

Official Members: Forex futures license with a regulatory number. The website displays official members and related company information. The application process is slower, requires taking NFA exams, and involves higher registration and maintenance fees.

Documents needed to apply for an NFA license:

Director's passport

U.S. company scan

Three-year development plan of the company

Director's resume

Personal bill

Criminal record clearance

Address proof of legal representative or director

Future financial plan

Time required to obtain an NFA license:

With complete documentation, it typically takes 2-3 days for non-members and 3 months for official members.

The NFA's main role is to ensure members strictly adhere to federal laws and CFTC rules through rigorous management. The NFA also has its own rules to oversee broker conduct towards traders and investors, protecting them from fraud.

NFA membership approval is available for Futures Commission Merchants (FCM), Introducing Brokers (IB), Commodity Trading Advisors (CTA), Commodity Pool Operators (CPO), Forex Dealer Members (FDM), and Swap Dealers (SD). CPO and CTA applications are relatively easier and have lower qualification requirements.

We are proud to inform you that Almcoin Exchange is also a licensed member of the NFA.