NFA and CFTC Regulatory Considerations

Timothy Peterson

In the United States, commodities and futures is one of the few industry areas where return calculation and presentation are specified by statute. The Code of Federal Regulations Title 17 (17 CFR) contains the codified Federal laws and regulations that are in effect as of the date of the publication pertaining to the financial markets/commodity futures and securities exchanges. While most financial markets are governed by regulators, 17 CFR Chapter 1 provides specific mathematical formulae and rules for the calculation and presentation of performance relating to commodities and futures as mandated by the Commodity Futures Trading Commission (CFTC). These broader regulatory requirements are further explained and detailed by rules promulgated by the National Futures Association (NFA).

This chapter is intended to provide an overview of the rules and regulations most pertinent to the individual(s) responsible for calculating, presenting, and reviewing performance.¹³The information in this chapter is not intended to serve as, or be a substitute for, professional advice on regulatory matters. The reader should consult with their professional legal and compliance advisers on specific