Although the majority of futures and forex transactions occur without issue, occasionally misunderstandings do happen. When either a broker or customer feels they have been wronged during the course of a transaction, NFA's Arbitration department provides a forum for dispute resolution.
NFA's arbitration program is generally cheaper, faster and less formal than civil litigation or other dispute resolution forums. Claimants do not have to refer to statutes and regulations to prove their claims. However, they are responsible for proving that they have incurred a monetary loss and deserve compensation. Arbitration also has fewer procedural requirements than litigation, which is why approximately 30 percent of the parties involved in NFA arbitration proceedings represent themselves. Additionally, NFA Members also can use the program to resolve disputes with other Members and Associate Members.
Additionally, NFA now offers mediation services for all claims, regardless of claim amount, free of charge. Mediation frequently saves time, money and resources for both parties. On average, NFA-sponsored mediation typically results in a settlement rate of about 70 percent.
The success of NFA's arbitration program is due in large part to the dedicated individuals who comprise the roster of approximately 1,300 active Member and non-Member arbitrators. Overall, statistics show that in the past five years, customers have received monetary awards in 50 percent of the cases for which hearings are held. In addition, those awards have averaged 65 percent of the compensatory amount claimed.