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NFA holds seminars on new Anti-Money Laundering rules for FCMs and IBs

A team of NFA employees recently conducted seminars in New York and Chicago to help Member FCMs and IBs understand their new Anti-Money Laundering Requirements. Approximately 40 people attended the two seminars in New York and nearly 100 attended in Chicago.

On October 26, 2001, President Bush signed into law the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001. The Act imposes significant new anti-money laundering requirements on all financial institutions, including FCMs, CPOs and CTAs. These financial institutions were required to establish anti-money laundering programs by April 24, 2002 (although the application of these requirements on CPOs and CTAs has been deferred to an unspecified date). Originally, IBs were not included in the definition of financial institution; however, NFA subsequently learned that the Treasury Department intended to include IBs in the definition.

NFA worked closely with the CFTC and the Department of the Treasury to develop a rule and interpretive notice that would impose the requirements outlined in Section 352 of the Act on its Members. At its February 2002 meeting, NFA's Board of Directors adopted NFA Compliance Rule 2-9(c) and an Interpretive Notice outlining the minimum standards that should be a part of any adequate anti-money laundering program.

"We consulted with the Futures Industry Association, the National Introducing Brokers Association and the Managed Funds Association on the practical aspects of these anti-money laundering procedures," says General Counsel Tom Sexton. "We incorporated many of their suggestions for changing the language in certain areas of the Notice." Anne-Marie Kaiser and Carol Wooding were the two attorneys assigned to writing the Rule and Interpretive Notice and planning the educational seminars for Member FCMs and IBs.

"We decided to target the first series of seminars to our FCM and IB Members because their anti-money laundering programs will necessarily be more complex than those of other Member categories," says Wooding. "Also, the Treasury Department has given CPOs and CTAs a deferral before their programs have to be established."

At the two-hour seminars, Wooding and Kaiser described NFA Compliance Rule 2-9(c) and Interpretive Notice on Anti-Money Laundering Compliance Programs. They then presented hypothetical scenarios to help attendees apply the program requirements to actual work situations. Compliance Associate Director Sharon Pendleton also highlighted key areas in NFA's audit review of Members' programs. "These programs are part of NFA's continued commitment to provide its Members with the information and guidance they need to meet their regulatory obligations," says Larry Dyekman, director of Communication and Education at NFA.

NFA is the premier independent provider of efficient and innovative regulatory programs that safeguard the integrity of the derivatives markets.
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