December 2, 2003

NFA Board Approves Pact with Eurex U.S.

CHICAGO (HedgeWorld.com)--The board of the National Futures Association approved a regulatory services pact with the U.S. Futures Exchange LLC, also known as Eurex U.S.

A spokeswoman for the NFA confirmed Nov. 21 that the vote was 16 to two but declined to say which two board members dissented.

"We are pleased that the partnership with Eurex U.S. was reaffirmed by the NFA's board of directors," said Rudolf Ferscha, chief executive of Eurex, in a statement Nov. 21. He added that he expects a strong regulatory program will protect both market participants and their customers.

The initial term of the agreement is three years, with automatic one-year renewals, for both market surveillance and trade practice surveillance services. The NFA is an independent, non-profit organization. Its president, Daniel Roth, testified before the Agriculture Committee of the House of Representatives Nov. 6 on the subject of the pending Eurex U.S. application before the Commodity Futures Trading Commission for designation as a U.S. contract market.

Mr. Roth testified that the NFA is aware that its reputation could be damaged if "Eurex U.S. either imposes barriers that make it difficult for NFA to perform regulatory services and uncover wrongdoing or fails to follow our recommendations in addressing regulatory problems. If either event occurs, NFA has the right to cancel the [regulatory services agreement] with Eurex U.S. and inform the CFTC of our reasons for doing so."

CFaille@HedgeWorld.com

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