NFA Regulated Brokers
NFA stands for the National Futures Association, one of the agencies that oversee the futures trading industry in the US. Specifically, the scope of NFA supervision includes retail and OTC (Over-the-Counter) futures trading. Everyone who does business with the public on US futures exchanges with more than 4,200 companies and 55,000 partners must comply with the same high standard of business professional ethics.
NFA is an agency that operates under the supervision of the Commodity Futures Trading Commission (CFTC), the government agency responsible for regulating the US futures industry. CFTC was formed in 1974 to regulate the futures and options markets. According to the Commodities Exchange Act, the CFTC is tasked with fostering open, transparent, competitive, and good markets, avoiding systemic risks and protecting market participants, clients, and their funds from fraud, manipulation, and other crime.
To become an NFA-regulated forex broker, a company must meet the strict requirements, both financially and in customer service. The initial capital for a brokerage company that wants to be regulated at NFA costs 20 Million USD. It is intended that brokers can anticipate the risks of market volatility and massive withdrawal requests. Retail forex brokers are also forbidden to accept deposits from credit cards.
Here is a list of NFA regulated brokers:
| Broker | Regulation | Max Leverage | Min Deposit | General Rating | |
|---|---|---|---|---|---|
|
Forex.com Australia 1999 |
CFTC/NFA 0339826 FCA (UK) 190864 FSA (Japan) 1539 IIROC May 10 2012 |
1:200 | $250 | Review | |
|
OANDA Canada 1995 |
CFTC/NFA 0325821 FCA (UK) 54257 FSA (Japan) 1571 Kanto Local Finance Bureau (Japan) 2137 |
1:50 | $1 | Review | |
|
Interactive Brokers Australia 1977 |
ASIC 453554 CFTC/NFA 0258600 FCA (UK) 208159 Monetary Authority of Singapore CMS100917 SEC (US) 8-47257 |
1:100 | $10000 | Review | |
|
IG Australia 1974 |
CFTC/NFA 0509630 FCA (UK) 195355 |
1:50 | $1 | Review | |
|
Ally Invest United States 2009 |
CFTC/NFA 0408077 | 1:50 | $1 | Review | |
|
FX Trading Pro United States 2018 |
CFTC/NFA 0509828 | 1:50 | $20 | Review | |
|
AMP Global Cyprus 2018 |
BaFin 154811 CFTC/NFA 0412490 CNMV (Spain) 4624 CONSOB (Italy) 4869 CySEC 360/180 FCA (UK) 819311 |
1:50 | $100 | Review |
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Advantages and Disadvantages of Trading in NFA Regulated Brokers
NFA is a competent broker regulator, so NFA-regulated brokers have a good reputation in their class. Customer protection provided by NFA includes penalties for illegal activities, the obligation to apply segregated accounts, problem-solving, and transparency.
By accessing the BASIC (Background Affiliation Status Information Center), traders can find out the names of NFA-regulated brokers. Transparency is also demonstrated by the broker's obligation to report weekly transactions on the NFA. Annual audit reports are also required to ensure the company's financial health. Besides, NFA-regulated forex brokers have licensed staff and have undergone special training.
Aside from the many advantages above, NFA regulated brokers also have some disadvantages, especially in terms of trading conditions. The maximum allowable leverage is 1:50, hedging is unallowed, and there are FIFO regulations. Before registering with an NFA regulated broker, the client must fill out a series of questions that include the level of knowledge in the trading world, sources of funds, large income, etc.
US-regulated forex brokers usually implicitly or explicitly advise traders who are not located in the US to register through their entities in other regions, which means their trading accounts will not enter the US regulatory workspace. However, for many traders, even though they cannot register directly with the US-regulated forex brokerage entity, having a registered status at CFTC and NFA is usually considered sufficient as a guarantee that the broker is not a scam broker and runs his activities according to high standards.
