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Proficiency Requirements

Individuals who are applying for NFA membership as a sole proprietor FCM, RFED, IB, CPO, CTA or for registration as an AP of these categories must satisfy proficiency requirements. Unless they are eligible for the alternatives listed below, they must have passed the National Commodity Futures Examination (NCFE or Series 3) within the two years preceding their application.

Individuals may not be required to take the Series 3 examination if:

  • they have passed the examination that they intend to use to satisfy the proficiency requirements:
  • within two years of the date the application is filed; or
  • more than two years prior to the date their application is filed and since that date there has not been a period of two consecutive years during which they were not registered as an AP or FB or were not an approved principal of a registrant; or
  • they are currently registered as a FB.

The testing application form (U10) must be completed online by visiting FINRA's website. Normally, NFA will receive evidence directly from FINRA that individuals have passed the Series 3 or another examination. In unusual circumstances, NFA may request the individual to submit proof that he or she passed an examination.

ALTERNATIVES

Based on the individuals' registration status and the type of business the individuals conduct, they may be eligible for one of the following alternatives to the Series 3 examination:

  • Futures Managed Funds Examination (Series 31)
    An individual may use the Series 31 if
  • the individual is registered with FINRA as a General Securities Representative with a FINRA member firm, and
  • that FINRA member firm is also an NFA FCM or IB member firm or an applicant for NFA FCM or IB membership and is sponsoring the individual for AP registration, and
  • the individual is going to limit futures activities on behalf of that NFA/FINRA sponsoring firm to soliciting funds, securities or property for participation in a commodity pool, soliciting discretionary accounts to be managed by CTAs or supervising persons who perform these same limited activities.
  • Limited Futures Examination - Regulations (Series 32)
    Individuals may use the Series 32 if, within the two years prior to filing the application, they have been registered or licensed to solicit customer business in futures in a jurisdiction outside of the United States (currently UK and Canada only). In order to be eligible for this alternative exam, applicants must submit proof of the appropriate registration or license to NFA along with additional information or documentation relating to an applicant's market knowledge such as completion of the appropriate qualifications testing. For example, in the UK an individual would need to be currently approved or have been approved as Control Function 30 (CF30) within the two years prior to filing the application and also provide one of the following Certificates in Derivatives: Unit 3 – Derivatives, Unit 7 – Financial Derivatives or Unit 9 – Commodity Derivatives; or Level 4 – Derivatives (Investment Advice Diploma – Derivatives). If an individual has been continuously approved as CF30 (previously CF21) since December 1, 2001, that individual would not be required to provide proof of having obtained a Certificate in Derivatives. Any questions regarding eligibility should be directed to NFA prior to taking the Series 32.
  • Referral of Securities' Clients
    Individuals are not required to take an examination if
  • the individual is registered with FINRA as a General Securities Representative with a FINRA member firm, and
  • that FINRA member firm is also an NFA FCM or IB member firm or an applicant for NFA FCM or IB membership and is sponsoring the individual for AP registration, and
  • the individual is going to limit futures activity on behalf of that sponsor to referring clients to APs of that sponsor, which referrals are solely incidental to the individual's business as a General Securities Representative of that sponsor, or supervising persons who perform this same limited activity.
  • Waivers for CPOs and CTAs Trading Primarily in Securities
    Under NFA Registration Rule 402, NFA may waive the examination requirements for certain individuals who are associated with CPOs that are required to register solely because they operate commodity pools principally engaged in securities transactions and/or who are associated with CTAs that are required to register solely because their securities advisory services include advice on the use of futures and options for risk management purposes. The individual or firm requesting the waiver must provide a written description of the facts that qualify the individual for a waiver.
  • APs Whose Activities are Limited to Swaps
    Individuals are not required to take an examination if their sole activities subject to CFTC regulation are and will continue to be limited to:
  • Soliciting or accepting on behalf of the sponsor orders for swaps subject to the jurisdiction of the CFTC;
  • Soliciting on behalf of the sponsor funds, securities or property for participation in a commodity pool that:
    • Exclusively trades swaps subject to the jurisdiction of the CFTC; or
    • Trades swaps subject to the jurisdiction of the CFTC in a commodity pool and the sponsor has been granted or is seeking a waiver from the Series 3 for its APs on the basis that but for the trading of swaps it would be eligible for the exclusion from the definition of CPO under CFTC Regulation 4.5(c)(2)(iii)(A) or (B) or an exemption from registration under CFTC Regulation 4.13(a)(3)
  • Soliciting on behalf of the sponsor clients to open discretionary accounts that exclusively trade swaps subject to the jurisdiction of the CFTC to be managed by registered CTAs; or
  • Supervising on behalf of the sponsor persons whose activities are so limited.
  • APs whose activities are solely limited to swaps are automatically exempt from the examination requirements.

    APs of CPOs that that would be excluded from the definition of commodity pool operator under 4.5(c)(2)(iii)(A) or (B) or exempt from registration under 4.13(a)(3) but for their swaps activities (i.e., the firm would meet the de minimis requirements if swaps were not included) will not be eligible to automatically claim the waiver. Instead, an AP's sponsor must send a signed request to NFA seeking a waiver based on these circumstances for its AP(s) from taking the Series 3 under NFA Registration Rule 401(e)(2)(ii).

NFA Branch Manager Examination (Series 30)

Individuals who are a Branch Office Manager and an AP of an NFA member firm must have passed the Series 30 within the two years preceding their application.

Individuals may not be required to take the Series 30 examination if:

  • they have passed the Series 30 examination within two years of the date the application is filed; or
  • they are currently approved as a Branch Office Manager; or
  • they were approved as a Branch Office Manager and since the last date the applicant was withdrawn as a Branch Office Manager, there has not been a period of two consecutive years during which they were not either temporary licensed as an AP or registered as an AP; or
  • individuals whose sponsor is a registered broker-dealer may provide proof that they are qualified to act as a branch office manager or designated supervisor under rules of FINRA.

Retail Off-Exchange Forex Examination (Series 34)

Amendments to NFA Bylaw 301 requires any individual seeking approval as a forex firm or forex individual to pass the Series 34 examination before engaging in off-exchange forex business with retail customers. The amendments grandfather certain individuals who were approved sole proprietors or registered as APs or FBs on May 22, 2008, from the Series 34 proficiency requirement.

The amendments provide that any individual applying for approval as a forex firm or forex individual shall not be granted approval as a forex firm or forex individual unless:

  • the applicant has satisfied the Series 3 or Series 32 proficiency requirement (as described above) and
  • NFA has received satisfactory evidence that the applicant has passed the Series 34 within two years of the date the application is filed or
  • since the date the applicant last passed the Series 34 there has been no period of two consecutive years during which the applicant has not been either registered as an AP or FB or an approved principal of a registrant; or
  • the applicant was registered as an AP, FB or an approved sole proprietor on May 22, 2008, and there has been no period of two consecutive years since that date during which the applicant has not been either registered as an AP or FB or an approved principal of a registrant.

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