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December 19, 2003
Proficiency Requirements for Security Futures Products
An NFA Interpretive Notice titled "NFA Compliance Rules 2-7 and 2-24 and Registration Rule 401: Proficiency Requirements for Security Futures Products" (paragraph 9049) provides that new registrants can satisfy their proficiency requirements for security futures by taking an appropriate training program if they take the Series 3 examination and apply for registration before the Series 3 examination is updated to include security futures questions. The Interpretive Notice also provides that new branch office managers and current supervisory personnel can satisfy the proficiency requirements for designated security futures principals through training before the Series 30 examination is updated. Current registrants and branch office managers can also satisfy their proficiency requirements by training.
Although the Interpretive Notice does not include a deadline for updating the Series 3 and Series 30 examinations, NFA expected to offer the updated examinations by January 2004.1 Given the trading volume in these products and the relatively small number of individuals who are interested in qualifying to engage in security futures activities, however, testing is an inefficient option at this time. Furthermore, the existing training program is an effective way to ensure that individuals who solicit accounts and orders from and manage accounts for customers trading in these markets have the necessary knowledge. Therefore, NFA has postponed updating the Series 3 and Series 30 examinations until activity increases to a point where a test becomes more practical. We understand that NASD is taking a similar approach to its testing requirements.
We will notify you if and when the examinations are updated to include security futures products. Until that time, registrants, branch office managers, and current supervisors may continue to qualify to engage in security futures activities by taking the web-based training program offered jointly by NFA and NASD or any other training program that follows the content outline posted on NFA's website.
Questions about the proficiency requirements can be directed to Joseph Patrick, Team Manager, Compliance, at email@example.com or (312) 658-6521.
1 The Interpretive Notice originally included a deadline of six months after the first security futures contract began trading, but the notice was previously amended, effective May 5, 2003, to eliminate that deadline.