Intermediaries

An intermediary is a person who acts on behalf of another person in connection with futures and options trading. Intermediaries are generally required to register with the Commission and, depending on the nature of their activities, may be subject to various financial, disclosure, reporting, and recordkeeping requirements. Intermediaries defined in the Commodity Exchange Act and Commission regulations include:

Futures Commission Merchant (FCM)

• Solicits or accepts orders for futures or options contracts traded on or subject to the rules of an exchange; and
• In or in connection with such solicitation or acceptance of orders, accepts money, securities, or property (or extends credit in lieu thereof) to margin, guarantee, or secure any trades or contracts that result or may result.

Introducing Broker (IB)

• Solicits or accepts orders for futures or options contracts traded on or subject to the rules of an exchange; and
• Does not accept any money, securities, or property (or extend credit in lieu thereof) to margin, guarantee, or secure any trades or contracts that result or may result.

Commodity Pool Operator (CPO)

• Engages in the operations of a collective investment vehicle; and
• In connection therewith, solicits or accepts funds, securities, or property for the purchase of interests in the collective investment vehicle.

Commodity Trading Advisor (CTA)

For compensation or profit:

• Engages in the business of advising others, either directly or through publications, writings, or electronic media, as to the value of or the advisability of trading in, any futures or options contract traded on or subject to the rules of an exchange, or any commodity option; or
• As part of a regular business, issues or promulgates analyses or reports concerning any of the activities referred to above.

The Division of Swap Dealer and Intermediary Oversight (DSIO) oversees the compliance activities of the futures industry self-regulatory organizations (SROs), including the U.S. futures exchanges and National Futures Association (NFA), with respect to financial and other requirements applicable to intermediaries.  DSIO conducts periodic reviews of SRO programs.

SRO OVERSIGHT REPORTS

Public Report on the Registration Program of the National Futures Association (June 2010)