Home > FAQs > Registration > Requirements for FCM/RFED and IB Applicants FAQs

Requirements for FCM/RFED and IB Applicants FAQs

  1. My firm is an FCM/RFED applicant. Besides the information requested in the Online Registration System, are there any additional filing requirements I need to be aware of?
  2. What kind of financial statements do I need to submit to become an FCM/RFED?
  3. My firm is an IB applicant. Besides the information requested in the Online Registration System, are there any additional filing requirements I need to be aware of?
  4. What is the difference between an independent IB and a guaranteed IB?
  5. What financial information do I need to submit to become a guaranteed IB?
  6. What kind of financial statements do I need to submit to become an independent IB?
  7. As an applicant, do I have to file my financial statements electronically?
  8. As an FCM/RFED or independent IB applicant, do I have to file any other financial information?
  9. How much excess capital should the applicant maintain?
  10. Are there any restrictions on where an FCM and FDM applicant is located?
  11. What happens to my firm's application if the firm doesn't file a financial statement right away?

1. My firm is an FCM/RFED applicant. Besides the information requested in the Online Registration System, are there any additional filing requirements I need to be aware of?

Yes. An FCM/RFED applicant must file financial information, copies of its policies and procedures, and certain other documents. A complete list can be found here.

Back to the Top

My firm is an FCM/RFED applicant. Besides the information requested in the Online Registration System, are there any additional filing requirements I need to be aware of?

2. What kind of financial statements do I need to submit to become an FCM/RFED?

An FCM/RFED applicant must file either:

1) a certified financial statement as of a date no more than 45 days before it is filed or

2) a certified financial statement as of a date no more than one year before it is filed and an uncertified financial statement as of a date no more than 17 business days before it is filed.

Back to the Top

What kind of financial statements do I need to submit to become an FCM/RFED?

3. My firm is an IB applicant. Besides the information requested in the Online Registration System, are there any additional filing requirements I need to be aware of?

Yes. An independent IB must file financial information and copies of its policies and procedures. A guaranteed IB must file a guarantee agreement and copies of its policies and procedures. A complete list can be found here

Back to the Top

My firm is an IB applicant. Besides the information requested in the Online Registration System, are there any additional filing requirements I need to be aware of?

4. What is the difference between an independent IB and a guaranteed IB?

An independent IB must maintain adjusted net capital of at least $45,000 but may introduce business to any registered FCM/RFED.  A guaranteed IB does not have to maintain a particluar level of net capital but, instead, is guaranteed by a particular FCM/RFED and is generally required to introduce all its business to that FCM/RFED.

Back to the Top

What is the difference between an independent IB and a guaranteed IB?

5. What financial information do I need to submit to become a guaranteed IB?

Instead of filing financial statements, a guaranteed IB must file a completed guarantee agreement between the IB and an FCM/RFED.

Back to the Top

What financial information do I need to submit to become a guaranteed IB?

6. What kind of financial statements do I need to submit to become an independent IB?

An applicant must file either:

1) a certified financial statement as of a date no more than 45 days before it is filed,

2) a certified financial statement as of a date no more than one year before it is filed and an uncertified financial statement as of a date no more than 17 business days before it is filed, or

3) an uncertified financial statement as of a date no more than 17 business days before it is filed.

If an IB applicant chooses the third option, however, NFA will conduct an examination within six months after the firm is registered, or NFA may require the applicant to file a certified financial statement before its registration becomes effective.

Back to the Top

What kind of financial statements do I need to submit to become an independent IB?

7. As an applicant, do I have to file my financial statements electronically?

No. An applicant may file statements either electronically or in hard copy. After the firm's application has been approved, however, that requirement will change.

Back to the Top

As an applicant, do I have to file my financial statements electronically?

8. As an FCM/RFED or independent IB applicant, do I have to file any other financial information?

Yes. All applicants for registration as an FCM/RFED or independent IB must submit a letter written on the applicant's business stationery describing the source of its current assets and representing that its capital has been contributed for the purpose of operating the business for which it is applying for registration and that it will continue to be used for that purpose. The letter must be signed by a principal of the firm.

Back to the Top

As an FCM/RFED or independent IB applicant, do I have to file any other financial information?

9. How much excess capital should the applicant maintain?

NFA encourages independent IB applicants to have at least $5,000 over their minimum net capital requirement and FCMs/RFEDs to be above the applicable early warning requirement. This gives the firm a cushion against falling below its capital requirement if it incurs unexpected liabilities.

Back to the Top

How much excess capital should the applicant maintain?

10. Are there any restrictions on where an FCM and FDM applicant is located?

Under NFA Compliance Rule 2-10(b), all FCMs and FDMs must:

(1) Maintain an office in the continental United States, Alaska, Hawaii, or Puerto Rico responsible for preparing and maintaining financial and other records and reports required by CFTC and/or NFA rules under the supervision of a listed principal and registered associated person of the FCM or Forex Dealer Member who is resident in that office; or

(2) If an FCM maintains an office in a jurisdiction that the CFTC has found to have a comparable regulatory scheme for purposes of Part 30 of the CFTC's rules and be subject to that regulatory scheme. This foreign office must be responsible for preparing and maintaining financial and other records and reports required by CFTC and/or NFA rules under the supervision of a listed principal and registered associated person of the FCM who is resident in that office.

Back to the Top

Are there any restrictions on where an FCM and FDM applicant is located?

11. What happens to my firm's application if the firm doesn't file a financial statement right away?

The firm's pending registration status as an FCM/RFED or IB will be withdrawn if the firm fails to file its financial statement with NFA within 90 days after it applies for registration.

Back to the Top

What happens to my firm's application if the firm doesn't file a financial statement right away?
NFA is the premier independent provider of efficient and innovative regulatory programs that safeguard the integrity of the derivatives markets.
Site Index | Contact NFA | News Center | FAQs | Career Opportunities | Industry Links | Home
© National Futures Association All Rights Reserved. | Disclaimer and Privacy Policy