The United States National Futures Association (NFA) plans to change Forex Transaction Reporting Execution Surveillance System (FORTRESS) fees.

NFA’s Forex regulatory program currently obtains the revenue needed to operate the program from three sources: (i) annual membership dues for FDMs for which NFA serves as the DSRO; (ii) annual membership dues for non-FDM Forex Members; and (iii) an assessment of $.003 on each order segment submitted to NFA’s FORTRESS by FDM Members. NFA utilizes FORTRESS to perform surveillance of FDM trading activity.

NFA’s Board requires that each of NFA’s regulatory programs be financially self-sufficient and maintain a minimum amount of reserves to cover the program’s projected operating expenses.

Although NFA’s Board reduced the FORTRESS segment fee effective January 1, 2020, the program continues to maintain reserves above the amount the Board believes is necessary for the program. Moreover, based upon current funding sources, it is expected that the forex regulatory program’s reserves will continue to increase without a reduction in its funding level.

That is why, NFA’s Board resolved to reduce the FORTRESS segment fee to reduce NFA’s forex regulatory program’s reserve balance to a level not to fall below at least 10 months of operating expenses.

On May 20, 2021, NFA’s Board unanimously approved the proposed amendments to NFA Bylaw 1301(e) and the Interpretive Notice entitled Forex Transactions to reduce the FORTRESS segment fee from $.003 to $.001. In addition, NFA’s Finance Committee and Executive Committee fully supported the proposed decrease in the FORTRESS segment fee.

NFA is invoking the “ten-day” provision of Section 17(j) of the CEA. NFA intends to issue a Notice to Members establishing an effective date of the proposed amendment to NFA Bylaw 1301(e) and the Interpretive Notice entitled Forex Transactions regarding a reduction in the FORTRESS segment fee from $.003 to $.001 as early as ten days after receipt of this submission by the Commodity Futures Trading Commission (CFTC), unless the Commission notifies NFA that the Commission has determined to review the proposal for approval.