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January 15, 2009
Annual Regulatory Reminder for Futures Commission Merchants
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. Therefore, we are providing you with an annual reminder regarding certain requirements that are not part of your day-to-day operations. This list does not capture all of your responsibilities for the upcoming year, but it should help remind you of certain non-routine requirements.
Within the next 12 months you will be required to:
Failure to satisfy all of the requirements in the annual update process within 30 days of your anniversary date will result in the withdrawal of your firm's NFA registration and/or Membership. Carefully check your registration record including address, contact information, and listed principals. Ensure any individual in a line of supervisory authority over Associated Persons ("APs") is also registered as an AP. For additional information on who has to register as an AP, see NFA's Notice to Members I-07-38 at http://www.nfa.futures.org/news/newsNotice.asp?ArticleID=1963.
2. Complete NFA's Self-Examination Checklist located on NFA's Web site at http://www.nfa.futures.org/compliance/selfexam.asp.
4. Conduct Anti-Money Laundering ("AML") training for relevant employees and complete an audit of your AML procedures and training. For guidance in preparing your AML procedures, please consult NFA's Anti-Money Laundering questionnaire (Appendix A of the Self-Exam Checklist).
5. Review your Point of Contact information for USA PATRIOT Act 314(a) information requests and notify NFA of any changes.
6. Test your Disaster Recovery Plan and make any necessary adjustments. For guidance in preparing your plan, please consult NFA's Business Continuity and Disaster Recovery Plan questionnaire (Appendix B of the Self-Exam Checklist).
7. Provide Ethics Training as outlined in your firm's written Ethics Training Procedures. For guidance in developing your procedure, please consult NFA's Ethics Training Policy questionnaire (Appendix C of the Self-Exam Checklist).
8. Supervise the operations of any GIBs and/or Branch Offices, including conducting an annual onsite audit of every GIB and Branch Office.
9. Submit a certified annual report within 90 days after the firm's fiscal year end, or if your firm is also registered as a Broker/Dealer, within 60 days after the fiscal year end (in addition to submitting the firm's monthly Focus II/I-FR-FCM with NFA via WinJammer).
10. For omnibus FCMs, submit the foreign futures and options report within 10 days after the end of each quarter.
11. For omnibus FCMs, file the Segregated Investment Detail Report (SIDR) on a monthly basis as of the last business day of the month. The SIDR must be filed with NFA by noon on the business day following the last business day of the month via NFA's EasyFile system. In addition to the monthly report, a firm is also required to file a SIDR when there is a change of 20% or more in any reported balance from the date of the last SIDR. This report must be filed by noon on the business day after the change occurs. This report does not replace a firm's current reporting obligations with respect to daily segregated funds information.
12. For FCMs that offer off-exchange foreign currency futures and options contracts (FOREX) to retail customers, file weekly electronic reports showing liabilities to customers and other required financial information as of the last business day of the week. File this report by noon on the following business day via NFA's EasyFile system.
13. For FCMs that offer FOREX to retail customers, 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).
14. For FCMs that offer FOREX to retail customers, 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.