Annual FCM and RFED Requirements
National Futures Association has always been committed to providing our Members with the resources they need to meet their regulatory obligations as efficiently as possible. During some of our recent audits, NFA Members have suggested that we provide them with an annual reminder regarding certain requirements that are not part of their day-to-day operations. Responding to this request, NFA sends an annual Notice to Members listing certain requirements you have for the upcoming year. Below are the items from this annual reminder email. This list does not capture all of your responsibilities, but it should help remind you of certain non-routine requirements.
- Complete an Annual Questionnaire
- Complete the electronic Annual Registration Update
- Pay your NFA dues on the anniversary date of your firm's registration
- Complete NFA's Self-Examination Questionnaire
- Submit daily and monthly financial information
- Conduct Anti-Money Laundering ("AML") training for relevant employees and complete an audit of your AML procedures and training.
- Review your Point of Contact information for USA PATRIOT Act 314(a) information requests and notify NFA of any changes (FCMs only).
- Supervise the operations of any GIBs and/or Branch Offices, including conducting an annual onsite inspection of every GIB and Branch Office.
- Contact active customers who are individuals, at least annually, to verify that the information obtained from that customer under NFA Compliance Rule 2-30(c) remains materially accurate, and provide the customer with an opportunity to correct and complete the information. If the customer notifies you of any material changes to the information, assess whether additional risk disclosure is required to be provided to the customer based on the changed information. However, if another FCM or IB introduces the customer's account on a fully disclosed basis or a CTA directs trading in the account, then notify that Member of the changes to the customer's information.
- Test your Disaster Recovery Plan and make any necessary adjustments.
- Provide Ethics Training as outlined in your firm's written Ethics Training Procedures
- For FCMs, designate a Chief Compliance Officer (CCO) and ensure that person is listed as a principal of the FCM. The CCO is required to prepare an annual report as outlined in CFTC Regulation 3.3(e). The Annual CCO Report must be submitted electronically to the CFTC through the Winjammer system not more than 90 days after the end of the FCM's fiscal year.
- For FCMs that offer FOREX to retail customers and RFEDs, provide written information regarding NFA's Background Affiliation Status Information Center (BASIC), including the web site address to every current customer (in addition to sending it to every new customer when the customer opens an account).
- For FCMs that offer FOREX to retail customers and RFEDs, review the security, capacity, credit and risk-management controls, and records provided by your electronic trading systems and certify that the requirements outlined in NFA Interpretive Notice 2-36(e) have been met. Prepare a certification, signed by a principal who is also a registered AP, and provide a hardcopy to NFA with the submission of your annual audited financial statement.
- For Forex Dealer Members (FDMs) designate one or more principal(s) to serve as CCO(s). Each CCO, as outlined in Compliance Rule 2-36, must certify annually to NFA that the FDM has a process in place to establish, maintain, review, modify and test policies and procedures that are reasonably designed to achieve compliance with the CEA, CFTC Regulations and orders thereunder, and NFA Requirements. Each CCO must also certify that the FDM has compliance processes in place and that the CCO has apprised the FDM's CEO (or equivalent management personnel) of the FDM's compliance efforts to date, as well as identified any significant compliance problems and the CCO's plan to address those problems. Each FDM must file this annual certification with NFA at the time it files it annual certified financial report.