NFA has tailored its audit program to ensure that NFA staff can complete an audit with as little disruption as possible to the Member firm. We view audits as a positive, collaborative process in which we support your firm's commitment to meet its regulatory obligations.

While all NFA Members are subject to being audited, the timing and frequency vary depending upon a number of factors, including the amount of money a firm has under management, customer complaints received, or concerns noted during our review of Disclosure Documents or financial statements filed with NFA.

Because NFA tailors an audit to each firm's business operations, the amount of time needed to conduct an audit varies. Auditors try to minimize the disruption to the Member's operations; however, they do have to perform a certain amount of work in the Member's offices. The best antidotes to a protracted audit are preparation and access to information.

NFA auditors communicate with the firm throughout the audit process. For example, if the auditors note any testing discrepancies or compliance deficiencies, they will immediately discuss them with the firm, giving the firm ample opportunity to work on correcting the problem.

Once the audit team has completed their work, they will conduct an exit interview, during which time they will recap everything that was discussed during the audit. They will also provide a written report after they return to NFA.

Available Resources
NFA has several resources available to advise and assist Members in establishing and maintaining the required records. These include the NFA Manual, containing all of NFA's rules, and a Regulatory Requirements Guide that describes in simple language the requirements for each type of business.

Another valuable source of information is the Self-Examination Checklist, which all NFA Members must complete on an annual basis. Review of the checklist should aid Members in recognizing potential problem areas and alert them to procedures that need to be revised or strengthened.

For example, the Checklist contains steps that will assist CPOs and CTAs in their review of Disclosure Documents, ensure that all required parties are registered and help Members comply with privacy policy requirements. The Checklist also offers guidelines for developing a disaster recovery or business continuity plan.

New Services
NFA's Compliance Department offers a new regulatory service designed for Members new to NFA and the futures industry. In an effort to expand its educational outreach, staff developed the concept of an "educational visit." If the new Member expresses interest in this service, a manager and a staff member from NFA's Compliance Department will meet with the firm's principals and describe the services that NFA provides, recordkeeping and reporting requirements, and NFA's audit process. These visits also give firms the opportunity to ask questions about their regulatory obligations and, in turn, provide NFA staff with the opportunity to learn about a new Member's business so that a future audit will be accomplished more efficiently.