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Registration Rules



RULE 302. TEMPORARY LICENSING FOR GUARANTEED INTRODUCING BROKERS.
[Adopted effective April 4, 1988. Effective dates of amendments: June 8, 1988; June 30, 1992; September 21, 1993; June 7, 1996; April 1, 1997; January 6, 1999; November 17, 2001; May 31, 2002; and September 30, 2010.]

(a) Qualifications. Notwithstanding any other provisions of these Rules, and pursuant to the terms and conditions of this Rule, NFA may grant a TL to any applicant for registration as an IB. To be eligible for a TL:

    (1) the IB must file with NFA:

      (A) A Form 7-R completed and filed in accordance with all pertinent instructions;

      (B) For each individual principal:

        (i) a Form 8-R completed and filed in accordance with all pertinent instructions;
        (ii) Legible fingerprints of the applicant, if a sole proprietor, and of each individual principal of the applicant on a fingerprint card provided by NFA for that purpose, unless the sole proprietor or principal has a current active status;
        (iii) the registration fees required by Rule 203(a) for the applicant and, if applicable, its individual principals; and

      (C) All other properly completed forms and documents that are required to become registered as an IB and to become an NFA Member.

    (2) If an FCM will be the guarantor it:

      (A) must be eligible in accordance with all NFA Requirements to enter into such an agreement;

      (B) must file with NFA:

        (i) a properly completed guarantee agreement (Form 1-FR Part B);
        (ii) a certification stating that to the best of the FCM's knowledge, information, and belief, all of the publicly available information supplied by the applicant and its principals on the Forms 7-R and 8-R is accurate and complete;
        (iii) and if the IB's registration is subject to conditions, an Acknowledgement of Conditioned Registration signed by the FCM (who must meet the requirements set forth in Rule 509(b)(5)) that contains all of the conditions required by the order imposing them;

    (3) If an RFED will be the guarantor it:

      (A) must be eligible in accordance with all NFA Requirements to enter into such an agreement;

      (B) must file with NFA:

        (i) a properly completed guarantee agreement (Form 1-FR Part B);

        (ii) a certification stating that to the best of the RFED's knowledge, information, and belief, all of the publicly available information supplied by the applicant and its principals on the Forms 7-R and 8-R is accurate and complete;
        (iii) and if the IB's registration is subject to conditions, an Acknowledgement of Conditioned Registration signed by the RFED (who must meet the requirements set forth in Rule 509(b)(5)) that contains all of the conditions required by the order imposing them;

    (4) At least one principal of the IB is an applicant for registration as an AP of the IB or is a registered FB;

    (5) Each principal who is an individual must meet the eligibility requirements for a TL in any capacity; and

    (6) NFA has received satisfactory evidence that each principal who is applying for registration as an AP of the IB satisfies the proficiency requirements contained in Part 400 of these Rules.

(b) A guarantee agreement filed in connection with paragraph (a)(2)(B)(i) or (a)(3)(B)(i) of this Rule shall become effective upon the granting of the TL.

(c) Restrictions Upon Activities.

    (1) An applicant for registration as an IB who has received notification from NFA that a TL has been granted may act in the capacity of an IB, subject to all CFTC rules, regulations, orders, and all NFA requirements.

    (2) An applicant for registration as an IB who has received a TL may be guaranteed by an FCM or RFED other than the FCM or RFED which provided the initial guarantee agreement described in paragraph (a)(2)(B)(i) or (a)(3)(B)(i) of this Rule if the IB submits to NFA:

      (i) written notice of the termination of the initial guarantee agreement; and
      (ii) a properly completed new guarantee agreement (Form 1-FR Part B) which will become effective the day following the last effective date of the initial guarantee agreement.

Such written notice and new guarantee agreement must be submitted to NFA 10 days prior to the termination of the initial guarantee agreement or within such other period of time as NFA may allow for good cause shown, in accordance with NFA Requirements and CFTC Regulations 1.10(j)(4)(ii), (j)(6).

(d) Termination of a Temporary License.

    (1) A TL shall terminate:

      (A) five (5) days after service upon the applicant of a notice by NFA pursuant to Rule 504 that the applicant may be disqualified from registration under Sections 8a(2) through 8a(4) of the Act;

      (B) upon the revocation or withdrawal of the guarantor FCM's or RFED's registration;

      (C) immediately upon termination of the applicant's guarantee agreement in accordance with NFA Requirements and CFTC Regulations 1.10(j)(4)(ii), (j)(6) unless a new guarantee agreement is filed in accordance with paragraph (c)(2) of this Rule;

      (D) upon failure of an applicant:

        (i) to respond to NFA's request for clarification of application information;
        (ii) to pay the registration fees pursuant to Rule 203(a) for the applicant or, if required, its principals; or
        (iii) to submit or resubmit fingerprints in accordance with such request;

      (E) whenever a person not listed as a principal on the applicant's registration application becomes a principal of the applicant after the TL is granted if the TL would not have been granted to the applicant had the applicant filed a Form 8-R for the principal prior to the TL being granted; or

      (F) upon notice to the applicant and its guarantor FCM or RFED that:

        (i) the applicant failed to comply with an award in an arbitration proceeding conducted pursuant to CFTC Rule 166.5 within the time permitted for such compliance as specified in Section 10(g) of NFA's Code of Arbitration or the comparable time period specified in the rules of a contract market or other appropriate arbitration forum;
        (ii) the applicant failed to pay the full amount of a reparations order within the time permitted under Section 14(f) of the Act;
        (iii) the applicant failed to comply with an order to pay a civil monetary penalty, restitution or disgorgement within the time permitted under Sections 6(e), 6b or 6c(d)of the Act;
        (iv) the applicant failed to disclose relevant disciplinary information in response to the disciplinary information questions on the Form 7-R;
        (v) any principal of the applicant failed to disclose relevant disciplinary information in response to the disciplinary information questions on the Form 8-R; or
        (vi) subsequent to the filing of the applicant's Form 7-R or any principal's Form 8-R, an event has occurred leading to an affirmative response to the disciplinary information questions on the applicant's Form 7-R or on any principal's Form 8-R.

    (2) Upon termination of a TL, the applicant may not engage in any activity which requires registration with the Commission as an IB.

(e) Relationship to Registration and Membership.

    (1) A TL shall not be deemed to be a registration or to confer any right to such registration.

    (2) The granting of a TL shall constitute the granting of NFA membership.

    (3) Termination of a TL will affect NFA membership as described in Bylaw 301(h).

    (4) Unless a TL has been terminated, a TL shall become a registration with the Commission upon the earlier of:

      (A) a determination by NFA that the applicant is qualified for registration as an IB; or

      (B) the expiration of six months from the date of its issuance unless NFA has issued a notice pursuant to Rule 504 that the applicant may be disqualified from registration under Sections 8a(2) through 8a(4) of the Act.

(f) Retention of Records. In accordance with Commission Regulation 1.31, the guarantor FCM or RFED must retain such records as are necessary to support the certification required by this Rule.

 
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