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Interpretive Notices



9056 - NFA COMPLIANCE RULE 2-6: CONDUCTING COMMODITY FUTURES BUSINESS WITH AN EXPELLED OR SUSPENDED MEMBER OR ASSOCIATE
(Board of Directors, May 19, 2005; effective July 20, 2005)

INTERPRETIVE NOTICE

In the last several years, NFA has encountered several instances where brokers, who have been barred from NFA membership as a result of an NFA disciplinary action, have continued to work at a Member firm. NFA Compliance Rule 2-6 provides that no Member or Associate shall conduct commodity futures business with a person who has been expelled or suspended or is subject to a similar sanction by NFA in a proceeding brought pursuant to Part 3 of NFA's Compliance Rules that temporarily or permanently prohibits the person from NFA membership or affiliation in any capacity with an NFA Member during the period the sanction is in effect unless authorized by the Business Conduct Committee, Hearing Committee or the Appeals Committee.

The purpose of this Rule is to address the problem described above. The phrase "commodity futures business", as used in Compliance Rule 2-6, means any and all activities performed by such persons on behalf of, and in connection with, an NFA Member's futures business. Therefore, a Member firm is prohibited from allowing a person who has been expelled or suspended or is subject to a similar sanction by NFA that temporarily or permanently prohibits the person from NFA membership or affiliation in any capacity with an NFA Member to perform any activities for or on its behalf regardless of whether such activities require registration or NFA membership. Member firms are also prohibited from having such persons acting for or on behalf of the firm in connection with its futures business, including as employees, consultants, independent contractors, agents or unpaid volunteers. Moreover, absent extraordinary circumstances, Member firms should not have such persons physically present in their offices.

 
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