NFA's BASIC and Futures Broker Research
Commodity Broker Database
NFA BASIC (Background Affiliation Status Information Center)
The NFA (National Futures Association) provides free access to its database of futures and options brokers and brokerage firms as well as the employment and discipline history (NFA arbitration awards and CFTC(Commodity Futures Trading Commission) reparation cases) of each. For those within the commodity industry, the database is commonly known as BASIC (Background Affiliation Status Information Center).
The goal of BASIC is to enable potential commodity traders to research the history of individual futures brokers and futures brokerage firms. DeCarley Trading encourages all traders to dillegently look into the background of those that you will consider doing business with. Unfortunately, many traders are simply unaware of this valuable resource.
It is important to realize that listed CFTC reparations do not infer guilt. A displayed claim may have been settled, dismissed or withdrawn but will be on the BASIC record of the broker for as long as the database is available. As you can imagine, while the intention is to protect investors it can sometimes result in false assumptions regarding the ethics of some industry insiders.
We recommend that you confront your broker to discuss any possible infringements of regulation or ethics. After all, it is your money and you deserve to fully understand the caliber of person that you will be hiring to help you find your way around the futures and options markets.
The NFA's online BASIC database also provides traders with information on any NFA arbitrations. Unlike the previously discussed CFTC reparations which involve a possible infraction of regulation, NFA arbitration is a dispute resolution forum. Naturally, you would likely want to know whether your broker may have been party to questionable practices in the past. However, once again it is only fair that you get his side of the story as simply being part of an arbitration hearing may not translate into any wrong doing.