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Financial Requirements

  1. What are my capital requirements?
  2. How do I calculate my Adjusted Net Capital?
  3. What do I do if my Adjusted Net Capital is below the minimum net capital requirement?
  4. What are the FCM, RFED and IB Financial Reporting Requirements?
  5. When are my financial statements due?
  6. How do I file my financial statements electronically with NFA?
  7. What happens if I file my financial statements late?
  8. How do I file my Daily Segregation Reports?
  9. I am a guaranteed introducing broker. How do I become an independent introducing broker?
  10. How do I file updated acknowledgement Letters for Accounts Holding Customer Funds?
  11. What are the procedures for filing Risk Management Programs?

1. What are my capital requirements?

The minimum net capital requirements for FCMs are found at NFA Financial Requirements Section 1, for independent IBs are found at NFA Financial Requirements Section 5, and for RFEDs and FCMs conducting retail forex business are found at NFA Financial Requirements Section 11. See Financial Requirements for FCMs and RFEDs and Independent IB Financial Requirements in the Compliance section of NFA's website for more information.

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What are my capital requirements?

2. How do I calculate my Adjusted Net Capital?

FCMs, RFEDs and Independent IBs are required at all times to maintain Adjusted Net Capital greater than their minimum net capital requirement. Adjusted Net Capital is computed as follows: Current Assets – Liabilities – Charges Against Capital = Adjusted Net Capital. See CFTC Regulation 1.17, Financial Requirements for FCMs and RFEDs and Independent IB Financial Requirements for information on how to calculate current assets, liabilities and charges against capital.

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How do I calculate my Adjusted Net Capital?

3. What do I do if my Adjusted Net Capital is below the minimum net capital requirement?

You must immediately notify the appropriate regulator. FCMs and RFEDs must immediately call the regional office of the CFTC, the CFTC's Washington DC office, and the firm's DSRO. If the firm is also a securities broker-dealer, it must also notify the SEC. Within 24 hours of the call, the firm must send written notification to these same organizations via facsimile. IBs must immediately call NFA and all FCMs the IB introduces accounts to. Likewise, the IB must send written notification via facsimile to all of these organizations within 24 hours of the call. See CFTC Regulation 1.12.

An undercapitalized firm must also take immediate action to bring its Adjusted Net Capital above the firm's minimum net capital requirement. Financial statements and supporting documentation must be sent to the agencies that received notification.

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What do I do if my Adjusted Net Capital is below the minimum net capital requirement?

4. What are the FCM, RFED and IB Financial Reporting Requirements?

Our Members have various reporting requirements. NFA has summarized them in the website sections FCM Reporting Requirements, RFED Reporting Requirements and Independent IB Reporting Requirements.

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What are the FCM, RFED and IB Financial Reporting Requirements?

5. When are my financial statements due?

FCMs and RFEDs must file monthly unaudited statements no later than 17 business days after the end of the month. Generally, Independent IBs must file semi-annual unaudited statements no later than 17 business days after the end of the six-month period. However, if the Independent IB is also a securities broker-dealer, it should file using the same cycle for which it files its FOCUS forms. Generally, FCMs and RFEDs and Independent IBs must file annual certified statements no later than 90 days after the close of the firm's fiscal year; however, if the firm is also a securities broker-dealer, its annual certified statement must be filed no later than 60 days after the close of the firm's fiscal year. 

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When are my financial statements due?

6. How do I file my financial statements electronically with NFA?

FCMs and RFEDs must file all monthly unaudited financial statements electronically using the WinJammer system. A copy of this filing must also be sent to the CFTC. Certified financial statements for FCMs and RFEDs must be filed through the WinJammer system. 

Independent IBs must also file their unaudited financial statements electronically. Broker-dealers filing FOCUS II or FOCUS IIA must use Winjammer to submit their unaudited financial statements, and they must submit their certified financial statements to NFA in hardcopy form. 1-FR-IB filers must use EasyFile to file both their unaudited and their certified financial statements.

Winjammer users go to Electronic Filings to file their statements and to learn how to become authorized to make filings. EasyFile users also go to Electronic Filings to file their statements, but they must ask their firm's Security Manager to authorize specific individuals to use the system.

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How do I file my financial statements electronically with NFA?

7. What happens if I file my financial statements late?

If financial statements are not filed by their due date, the Member will be charged a late filing fee of $1,000 per business day late.

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What happens if I file my financial statements late?

8. How do I file my Daily Segregation Reports?

An FCM that holds customer segregated funds, funds received from foreign futures and options customers, and funds received from cleared swaps customers must file daily reports with NFA by noon of the following business day. The FCM must inform NFA's Compliance Department prior to accepting customer funds, and NFA will then set up a web-based reporting system for that FCM.

In addition to filing daily reports, an FCM who holds customer segregated funds, secured amount funds and/or cleared swaps customer collateral must file the Segregated Investment Detail Report (SIDR) on a semi-monthly basis via WinJammerTM. The SIDR must be filed with NFA by noon on the business day following the 15th and the last business day of each month for information as of the close of the 15th (or the following business day if the 15th falls on a weekend) and the last business day of each month. See the SIDR Statement Due Dates for the list of filing due dates.

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How do I file my Daily Segregation Reports?

9. I am a guaranteed introducing broker. How do I become an independent introducing broker?

To become an independent IB, a guaranteed IB must file a notice with its guarantor and NFA terminating the guarantee agreement and must file a financial statement with NFA demonstrating the IB's  compliance with the minimum net capital requirements. The financial filing requirement may be satisfied by filing either 1) an audited Form 1-FR-IB or FOCUS Report that is less than 45 days old as of the date received by NFA or 2) an audited Form 1-FR-IB or FOCUS Report that is less than one-year-old as of the date received by NFA and an unaudited Form 1-FR-IB or Focus Report that is less than 17 business days old as of the date received by NFA.  

The IB must include a statement describing the source of its current assets and representing that its capital has been contributed for the purpose of operating its business and will continue to be used for that purpose. Additionally, the IB must file a statement establishing a fiscal year-end.

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I am a guaranteed introducing broker. How do I become an independent introducing broker?

10. How do I file updated acknowledgement Letters for Accounts Holding Customer Funds?

Each FCM and depository holding customer funds must use a standard template acknowledgement letter for all accounts opened on or after January 13, 2014. FCMs and depositories have until July 12, 2014 to execute new letters that conform to the template acknowledgement letters for all accounts that were opened prior to January 13, 2014.

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How do I file updated acknowledgement Letters for Accounts Holding Customer Funds?

11. What are the procedures for filing Risk Management Programs?

Each FCM is required to file policies and procedures describing their risk management program pursuant to CFTC Regulation 1.11. FCMs should file their risk management programs through the WinJammer system.

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What are the procedures for filing Risk Management Programs?
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