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The Complete Guide to Futures Trading: What You Need to Know about the Risks and Rewards by Lind-Waldock

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CHAPTER 14

The Business of Futures

Who Does What

Public confidence is the cornerstone of the financial services industry. We've all seen what can happen to markets when the public loses its confidence in them or when the public loses confidence in analysts making recommendations or in corporate accounting or management practices.

The best way to create and preserve public confidence is to ensure that the highest levels of integrity are demanded of each and every market professional. Customers need to know that the firms and individuals with whom they are transacting business are properly licensed, are sufficiently knowledgeable about the products and services they offer, and have the best interests of their customers at heart.

The futures industry attempts to preserve the integrity of trading with several levels of participants: Regulators, exchanges, brokerage firms and, finally, the individual brokers and advisors who deal directly with customers.

REGULATORY STRUCTURE

Regulation is the single most effective way to ensure the public's confidence in the integrity of the marketplace. In the United States, regulation is provided by a combination of federal oversight agencies and self-regulatory organizations. Unlike most other countries throughout Europe, Asia, and the rest of the Americas, where there is a single regulatory authority with responsibility for the entire financial services community, the United States currently has similar, but distinct, regulatory structures for the ...

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