US futures and derivatives markets sit under a two-layer regulatory structure. The Commodity Futures Trading Commission is a federal agency with statutory authority over the market. The National Futures Association is an industry self-regulatory organisation that registers and supervises the firms operating in it, under CFTC oversight.
How the two bodies divide the work
| CFTC | NFA | |
|---|---|---|
| Type of body | Independent federal agency | Self-regulatory organisation |
| Created | 1974, by the Commodity Futures Trading Commission Act | 1982, designated by the CFTC |
| Authority from | The Commodity Exchange Act | CFTC designation and member agreement |
| Main role | Rulemaking, market oversight, federal enforcement | Registration, member examination, arbitration |
| Funding | Congressional appropriation | Member dues and assessment fees |
| Public database | Enforcement actions, market data, COT reports | BASIC registration and disciplinary lookup |
What this means for a retail account
Any firm soliciting or accepting futures orders from US customers must be registered with the CFTC and be a member of the NFA. That registration is verifiable in a free public database, and checking it is the single most useful diligence step available before funding an account.
Registration establishes that a firm is subject to the rules: capital requirements, segregation of customer funds, disclosure obligations, and NFA examination. It does not vouch for the firm’s financial strength or its conduct. A registered firm can still fail, and the disciplinary history in the same database is where that record lives.
Registration categories
Firms and individuals register in defined categories. Futures commission merchants hold customer funds and carry positions. Introducing brokers solicit orders but do not hold funds. Commodity trading advisors give advice for compensation, and commodity pool operators run pooled investment vehicles. Individuals dealing with customers register as associated persons.
The category determines which rules apply, which is why the distinction between a firm that holds your money and one that does not is worth understanding before you open an account.
What sits outside this framework
The CFTC’s jurisdiction covers futures, options on futures, swaps, and certain retail commodity transactions. Securities are the SEC’s remit. Spot foreign exchange between institutions largely falls outside both. Offshore platforms offering futures-like products to US residents without registration are operating illegally, and customers of those platforms have none of the protections described here.
Detailed coverage
- What the CFTC does
- What the NFA does
- How to check a futures broker with NFA BASIC
- Segregated funds and customer protections in futures
- FCMs and introducing brokers explained
This page is for informational purposes only and is not trading, tax, legal, or financial advice. Regulatory registration does not guarantee the solvency or conduct of any firm, and does not protect against trading losses. Consult a licensed professional before making decisions based on your specific situation. See our Legal Disclaimer for details.