What is 'Association Of Futures Brokers And Dealers - AFBD'

Association Of Futures Brokers And Dealers (AFBD) was an organization established by the major London futures exchanges to provide regulatory supervision for brokers, dealers and other practitioners in the futures industry.

The association was a self-regulating organization when it was founded in 1984, but was later incorporated into the Financial Services Authority, or FSA, which itself has since been abolished, with its regulatory duties split between the new Financial Conduct Authority, or FCA, and Prudential Regulation Authority (PRA), which is structured as a limited company owned by the Bank of England.

BREAKING DOWN 'Association Of Futures Brokers And Dealers - AFBD'

The Association of Futures Brokers and Dealers was formed to be a self-regulatory organization to oversee futures broker and dealer activity. The association developed and maintained standards to which British brokers and dealers on futures exchanges were expected to adhere.

In 1991, AFBD merged with The Securities Association to form the United Kingdom's Securities and Futures Authority, or SFA, which sets the rules of fair practice as well as capital requirements for firms active in the securities, futures and options markets.

In 2001, the FSA was launched, or rather renamed from the former Securities and Investments Board, taking over the role that had been played by SFA.

In 2010, then Chancellor of the Exchequer George Osborne announced the abolishment of  the FSA with plans to delegate its powers across other agencies and the Bank of England. The plan was finalized in 2013. FCA is the "conduct regulator for 58,000 financial services firms and financial markets in the UK and the prudential regulator for over 18,000 of those firms." Bank of England-owned PRA is develops rules requiring financial firms "to hold sufficient capital and have adequate risk controls in place."

Regulation of Futures Brokers And Dealers today

Most futures firms today are regulated by the FCA. The agency issues warnings, such as this one, against specific brokers it deems as posing potential risks to investors: "We believe this firm has been providing financial services or products in the UK without our authorisation. Find out why to be especially wary of dealing with this unauthorised firm and how to protect yourself from scammers."

FCA maintains a Financial Services Register that allows consumers to ensure that specific futures dealers are authorized by the agency. It also maintains a helpline for those who have been approached by an unauthorized firm or feel they may be victim of a scam.

"Financial markets need to be honest, fair and effective so that consumers get a fair deal," according to FCA. "We aim to make markets work well – for individuals, for business, large and small, and for the economy as a whole."

RELATED TERMS
  1. Dealer Bank

    Dealers banks are commercial banks, registered with the Municipal ...
  2. Note Auction

    A note auction is a formal bidding process that is scheduled ...
  3. Financial Services Authority - ...

    The Financial Services Authority was the financial services regulatory ...
  4. Primary Dealer

    A primary dealer is a pre-approved bank, broker/dealer, or other ...
  5. Rules of Fair Practice

    The Rules of Fair Practice is a code of conduct for U.S. broker-dealers ...
  6. Dealer Option

    A dealer option is a contract issued on a physical commodity, ...
Related Articles
  1. Investing

    Picking your first broker

    If you're a rookie investor, choosing a broker may be your first big investment decision. Learn more on whether you should you go with a full-service broker or a discount broker.
  2. Insights

    Why Don’t Regulators Check All Financial Professionals?

    Reports indicate that there is a growing need for increased supervision of brokers.
  3. Trading

    How Forex Brokers Make Money

    Forex brokers set their prices based on commission, spread, or a combination of both. Traders have to be cautious in the thinly regulated forex market.
  4. Trading

    An Introduction To Securities Markets

    The global securities market is constantly evolving. Discover the most popular market structures currently in use.
  5. Investing

    What is a Discount Broker?

    A discount broker is a stockbroker who carries out "buy" and "sell" orders at a reduced commission compared to a full-service broker, but provides no investment advice.
  6. Trading

    5 Tips For Selecting A Forex Broker

    Discover the best ways to find a broker who will help you succeed in the forex market.
  7. Investing

    A Look At Primary And Secondary Markets

    Knowing how the primary and secondary markets work is key to understanding how stocks, bonds and other securities are traded.
  8. Trading

    Top 10 Forex Brokers in the UK (FXCM, GCAP)

    Learn about the regulation of the foreign exchange market (forex), the Financial Conduct Authority (FCA) and the top 10 UK brokers that are FCA regulated.
  9. Managing Wealth

    The Top U.S. Regulated Stock Brokers (AMTD, IBKR)

    To operate in the United States, stock brokers must comply with SEC regulations that protect investors. Here is a look at some of the best.
  10. Investing

    GM Dealers in India Threaten to Sue Over "Measly" Compensation

    Indian auto dealers are reportedly threatening to sue GM if the company doesn’t offer more to compensate for no longer selling vehicles in the country.
RELATED FAQS
  1. Why are most brokerage firms owned by banks?

    Learn about the differences between investing with a bank-owned brokerage firm or with an independent broker. Get real answers ... Read Answer >>
  2. Can a Broker Sell Your Stocks Without Permission?

    In this article, find out if and when it's legal for a broker to sell securities from a customer's account and portfolio ... Read Answer >>
  3. Why Are Securities Held 'In Street Name'?

    Buying or selling securities through a broker means they're held in your broker's name. Read Answer >>
Trading Center