About the Online Registration System and Security

What type of system requirements and settings do I need to have?

National Futures Association web-based applications require a currently supported version of Microsoft Internet Explorer or Firefox. NFA recommends keeping browser levels and maintenance current as an overall best practice. Access to confidential data in NFA applications is secured using 128 bit Secure Sockets Layer. (SSL). NFA applications also require cookies and Scripting of Java Applets to be enabled. If you can use the CRD system or transact business on the Internet on web sites like Amazon.com, you should be able to use ORS. Contact your network administrator, use the Help function or visit the web sites listed below to determine if your system can support these requirements.

Internet Explorer updates are available at:

http://www.microsoft.com/windows/ie

Firefox updates are available at:

http://www.mozilla.com/en-US/

When will the Online Registration System be available?
The ORS system is not available for use from 10:00 PM to 2:30 AM CT from Monday through Friday. The system may also occasionally be unavailable at other times due to system maintenance.

What type of support can I expect as a user of the Online Registration System?
ORS contains an online tutorial that provides step-by-step instructions for the most common registration tasks, such as completing a registration application, changing registration information, requesting withdrawal of a firm's registration and notifying NFA of an individual's termination.

In addition, NFA's Information Center (800-621-3570 or 312-781-1410) will be available to answer questions about the Online Registration System and registration requirements. The Information Center's hours of operation are from 8:00 AM to 5:00 PM CT Monday through Friday. You may also e-mail inquiries to information@nfa.futures.org.

How does my firm get access to the Online Registration System?
To use ORS, firms, including sole proprietors, will need to establish security accounts with NFA and designate a Security Manager. To do this, you must access and complete an enrollment form. This form requests information about the individual your firm wishes to act as its Security Manager. When you submit the enrollment form, you will be provided with a temporary password. NFA will notify you by letter when it approves your firm's enrollment request and will provide a UserID for the Security Manager to use along with the temporary password to login to ORS. The first time that the Security Manager logs in, ORS will prompt him or her to change the password, after which the Security Manager will have access to ORS.

What are the duties of the firm's Security Manager?
The Security Manager will have complete authority and responsibility to establish and maintain sub-accounts for other ORS users at your firm. To establish a user sub-account, the Security Manager will enter the name and some identifying information about the user, e.g., social security number and date of birth, and assign one of four security levels for the user. These levels are view only; update; file; and Security Manager. The Security Manager for an IB and/or CPO with financial reporting requirements can also assign one of two security levels for users to access the Easy File System. These levels are enter, and enter and submit. ORS will assign a User name and temporary password for each user the Security Manager establishes, and the user will be prompted to change the password upon logging on to ORS the first time. The Security Manager will administer all of the user sub-accounts. For example, if the user forgets the password, the Security Manager can reset it or if a user leaves your firm, the Security Manger must delete the user's sub-account. In addition, by virtue of being a Security Manager, that person will be able to view, update and file registration information.

How does a floor broker or floor trader get access to the Online Registration System?
Like firms, floor brokers and floor traders must establish security accounts with NFA by completing an enrollment form. However, FB/FTs may not designate anyone except themselves as the Security Manager. When a FB/FT submits the enrollment form, the FB/FT will be provided with a temporary password. NFA will notify the FB/FT by letter when it approves the enrollment request and will provide a UserID for the FB/FT to use along with the temporary password to login to ORS. The first time that the FB/FT logs in, ORS will prompt him or her to change the password, after which the FB/FT will have access to ORS. As their own Security Manager, they can establish other user sub-accounts but may only assign view only or update security levels for those users. The FB/FT Security Manager has the same authority and responsibility for his or her security account as a firm's Security Manager has for a firm's security account.

What types of tasks do the different security levels allow users to perform?
There are six security levels which permit users to perform the following types of tasks:

ORS

View The user can look at information in ORS. Update The user can file updates to existing registration information. They can also enter information into applications, firm withdrawal requests and individual withdrawal notices but not file them. File The user can file applications, firm withdrawal requests and individual withdrawal notices. Security Manager The user can create and delete other security managers and users and modify the security levels of users other than security managers.

Easy File

Enter The user can enter the financial information into the system but not submit the statement. Enter and Submit The user can submit the statement.

Each higher security level includes the ability to perform all the tasks associated with the lower security levels. For example, Update users can also look at information in ORS like a View user can.

Where can the Security Manager find the temporary password if he or she can't remember it?
If the Confirmation page was printed, the temporary password that is generated when enrolling is located on the line above the Security Manager information.

What can the Security Manager do if he or she loses or forgets the password after successfully submitting the enrollment form?
Security Managers can use the password reset process to electronically reset their passwords. There are two ways to access the password reset process. You can select the option from NFA's web site at www.nfa.futures.org using either the Online Registration System menu under the Registration tab or the Electronic Filings menu under the Compliance tab. Alternatively, if you have had three unsuccessful attempts when trying to log in to ORS or EasyFile, you will receive a message that will provide you with a link to the password reset process function.

To reset your password, you will need your Username (ID used to log on to the system) and the Security Manager security information provided on the enrollment form. If any of this information is unknown, you will not be able to use the password reset process. Instead, you will need to contact our Information Center at (800) 621-3570 or (312) 781-1410 to have your password reset.

Will firms have only one Security Manager?
The initial Security Manager that NFA creates for a firm can create additional Security Managers. If a firm sets up additional Security Managers it can distribute the responsibility for setting up firms users and managing their accounts, e.g. resetting passwords, deleting accounts for those who leave the firm, etc. It's important to remember that all Security Managers have the same level of authority. There is no "master" Security Manager with respect to system security.

Why do I get an error message telling me my web browser does not support 128-bit encryption when I try to go to the Enrollment web page?
Your browser encryption is set to less than 128 bit Secure Sockets Layer (SSL). The ORS Enrollment site only supports Microsoft Internet Explorer and Firefox.
Refer to: What type of system requirements and settings do I need to have?

What if a user forgets his/her UserID or password?
Users who forget their UserID or password must contact the Security Manager. The Security Manager can provide the UserID and/or reset the password, as the case may be.

How does an AP or principal get access to the Online Registration System?
Individuals who are AP applicants or principals will only be able to access ORS to complete their application, if their firm lets them, and to verify the application after their firm files it. Their firm will provide them with a temporary UserID and password to perform these functions.

How long is a temporary UserID and password good for?
Each temporary UserID and password are valid until the application for which they were issued is verified.

What if I forget my temporary password?
If you forget your password, you must contact your sponsor's Security Manager to reset your password.

Can I use my temporary UserID and password to do anything else in ORS?
No, only to fill out and verify your application.

Can one firm perform the registration activities for another firm?
Yes. A firm can authorize another firm to perform all of its registration activities. Firms that wish to do this should contact NFA's Information Center (800-621-3570 or 312-781-1410). FCMs that guarantee IBs will automatically have this ability.

Will floor brokers and floor traders need to file triennial updates in the Online Registration System?
No. The triennial update process for FBs and FTs has been eliminated. As with other registrants, FBs and FTs have an ongoing obligation to ensure that the information in their registration records is current.

What types of communication will there be to keep me informed about the status of my application?
All communication about an application will be between NFA and the firm, floor broker or floor trader applicant or the firm who submitted the application on behalf of an individual applicant or principal. Electronic notices will replace most of the current routine letters from NFA to sponsors, applicants and registrants. These notices will appear in a list on a web page that the firm, floor broker or floor trader can access. Some messages will provide the notices required by the rules, such as when a TL or registration is granted or when a TL has been withdrawn. Other messages will inform the firms, FBs and FTs of filings they may need to make, such as re-submission of smudged fingerprint cards. NFA will, however, continue to send letters to request disclosure of disciplinary matters that come to NFA's attention and submission of documents related to disciplinary matters. In addition, firms, FBs and FTs will have access to a web page called Outstanding Requirements that shows any additional filings they need to make for themselves or the firms' APs and principals and any matters that must be resolved in order for registration to be granted.

If any of the disciplinary information questions on Forms 7-R or 8-R are answered "yes" what is the likelihood that the registration will be approved?
If the matter disclosed is a disqualification from registration under either Section 8a(2) or 8a(3) of the Commodity Exchange Act, the application will probably be reviewed by a special NFA committee. The committee will review the circumstances of each disqualification independently and decide whether to approve the registration.

What does adjudication mean?
In a criminal case, adjudication is the determination by the court that the defendant is guilty or not guilty.

What is a criminal charge?
A criminal charge is a complaint, information, indictment or equivalent instrument that contains an accusation of a crime.

Should an arrest that did not result in criminal charges be disclosed?
No; however you may be required to provide documentation indicating that no criminal charges were filed. If so, a letter from the applicable district attorney, arresting agency, or a court search is sufficient.

If a criminal case is filed in a state or country that does not classify offenses as a felonies or misdemeanors, is disclosure still required?
Disclosure is required because the offense could be deemed a felony or misdemeanor based upon the potential sentence. Therefore, if the matter were punishable by a sentence of at least a one-year imprisonment or a fine of at least $1,000, it would be considered equivalent to a felony and should be disclosed under Form 7-R or Form 8-R, Disciplinary Information-Criminal Disclosures. This would also apply to a general court martial.

If the matter were punishable by a sentence of less than one-year imprisonment or a fine of less than $1,000, it would be considered equivalent to a misdemeanor. Specified misdemeanor charges to which you pleaded guilty or of which you were found guilty or convicted, should be disclosed under Form 7-R or Form 8-R, Disciplinary Information-Criminal Disclosures. This would also apply to a special court martial.

Do felony charges have to be disclosed?
If felony charges are pending against you, you must answer "yes" to Question C, Disciplinary Information-Criminal Disclosures. If you pled guilty, nolo contendere ("no contest") to or been convicted or found guilty of any felony offense, you must answer "yes" to Question A, Disciplinary Information-Criminal Disclosures. If you were subject to felony charges that were dismissed or nolle prossed and you did not pled guilty, nolo contendere ("no contest") to nor were you convicted or found guilty of the felony charges, then disclosure is not required however you may be required to provide documentation confirming the final disposition of the felony charges.

If I was charged with a felony but I was not convicted or the charge was reduced to a misdemeanor, do I need to answer "yes" to any questions?
If you pleaded not guilty and were found not guilty, you do not need to answer "yes" to any question. However, if you pleaded guilty or no contest to, or were found guilty of a felony, you must answer "yes" to Question A, Disciplinary Information-Criminal Disclosures, even if it did not result in a conviction. If the felony charge was reduced to a specified misdemeanor to which you pleaded guilty or of which you were found guilty or convicted, you are required to answer "yes" to Question B, Disciplinary Information, Criminal Disclosures.

Which misdemeanor offenses are required to be disclosed?
Form 7-R and Form 8-R, Disciplinary Information-Criminal Disclosures, Question B describe which misdemeanor plea or conviction requires disclosure. NFA's Registration Investigations staff is available at (312) 781-1410 or (800) 621-3570 if you've read the forms and are still not sure.

Should criminal offenses involving the failure to file income tax returns or charges filed in a military court be disclosed?
Income tax offenses are treated like all other criminal matters. If you pleaded guilty or no contest to, were found guilty of or were convicted of a felony income tax offense, you must answer "yes" to Question A, Disciplinary Information-Criminal Disclosures. If you pleaded guilty to, were found guilty or convicted of a specified misdemeanor income tax offense, you are required to answer "yes" to Question B, Disciplinary Information-Criminal Disclosures. If felony or misdemeanor income tax charges are pending against you, you must answer "yes" to Question C, Disciplinary Information-Criminal Disclosures. These same rules apply to matters that are the subject of a military court proceeding. Matters that are the subject of a general court martial are considered felonies and matters that are the subject of a special court martial are considered misdemeanors. NFA's Registration Investigations staff is available at (312) 781-1410 or (800) 621-3570 if you've read the Disciplinary Information-Criminal Disclosure questions and are still not sure.

Do gambling offenses have to be reported?
Gambling offenses are treated like all other criminal matters. If you pleaded guilty or no contest to, were found guilty of or were convicted of a felony gambling offense, you must answer "yes" to Question A, Disciplinary Information-Criminal Disclosures. If you pleaded guilty to, were found guilty or convicted of a misdemeanor gambling offense, you are required to answer "yes" to Question B, Disciplinary Information-Criminal Disclosures. If felony or misdemeanor gambling charges are pending against you, you must answer "yes" to Question C, Disciplinary Information-Criminal Disclosures. NFA's Registration Investigations staff is available at (312) 781-1410 or (800) 621-3570 if you've read the Disciplinary Information-Criminal Disclosure questions and are still not sure.

My lawyer told me that I don't have to disclose my criminal offenses because the Court expunged them from the record. Is that correct?
No. The Commodity Futures Trading Commission requires that all criminal matters involving felonies and specified misdemeanors to which you have pleaded guilty, must be disclosed, regardless of whether they have been expunged; set aside or sealed; there was a conditional discharge or post-conviction dismissal; a state certificate of relief from disabilities was issued; or a pardon was granted.

If I pleaded guilty to a felony or one of the specified misdemeanors and the Court later vacated my guilty plea, do I still have to disclose that?
Yes, unless you then pleaded not guilty and were found not guilty after a trial.

If a criminal conviction is pardoned, is disclosure still required?
Yes.

If a criminal matter is disclosed, what documents must be submitted?
It is best to request the entire file from the court and submit all the documents to NFA. NFA will probably request additional documents from you if your documents do not reflect all of the following information:

• The complaint
• Your entry of a plea or plea agreement, or conviction
• The sentence
• Proof that you completely satisfied your sentence
• The final outcome of the court's action (i.e., dismissal)

You should always submit a notarized statement to NFA that describes in your words, the circumstances surrounding the arrest.

Where can copies of criminal documents be obtained?
The court where the case was handled can provide copies of the court documents or conduct a court search.

What happens if a criminal matter is not disclosed?
NFA will most likely find out about the matter while conducting the background check with the FBI. Failure to disclose matters could be deemed an additional disqualification from registration. It is in your best interest to disclose all applicable matters.

Do I need to disclose any matter that isn't related to the futures industry?
Yes. Only Question J, Disciplinary Information-Financial Disclosures on the Form 8-R is limited to activity in the futures industry.

Does an arbitration case or claim filed against me with the Financial Industry Regulatory Authority. require disclosure?
Only unpaid commodity arbitration awards require disclosure under Form 8-R, Disciplinary Information- Financial Disclosures, Question J. Otherwise, pending, adjudicated, settled or dismissed arbitration matters do not need to be disclosed.

Does a reparations case filed against me with the Commodity Futures Trading Commission require disclosure?
Unpaid reparations awards require disclosure under Form 8-R, Disciplinary Information-Financial Disclosures, Questions J. Otherwise, pending, adjudicated, settled or dismissed reparations matters do not need to be disclosed.

What documentation is required if a Chapter 7 or Chapter 11 petition for bankruptcy was filed within the past 10 years?
Disclosure of a bankruptcy matter is required only if the bankruptcy trustee filed an adversary action against you. For those cases, you should provide NFA with a copy of the initial complaint and the final disposition of each matter.

Does a sole proprietor have to disclose personal disciplinary actions on both the Form 7-R and Form 8-R?
Yes, the same information must appear on both the Form 7-R and Form 8-R.

How are firm, associated person and principal applications for registration filed?
Firms must electronically file their applications (Form 7-R) and the applications for their Associated Persons and principals (Form 8-R) using ORS. These electronic applications are also referred to as "paths" in ORS. NFA no longer accepts any hard copy applications except applications for registration as an agricultural trade option merchant (ATM CFTC Form 7-R) and their affiliated individuals (ATM CFTC Form 8-R); Notice Form 7-R for Broker-Dealers that are eligible for notice registration as an FCM or IB; and Notice Form BD-N for FCMs and IBs that are eligible for notice registration as Broker-Dealers.

Firms may authorize anyone to file applications on their behalf. The firm authorizes persons to file applications when the firm's Security Manager establishes the person as a "file" security level user.

The Online Registration System tutorials contain detailed instructions on how to complete the application, update and withdrawal paths for most situations.

How do I file an application for registration as a Floor Broker or Floor Trader?
Individuals who wish to apply for registration as a floor broker or floor trader must electronically file their applications using ORS.

Can I authorize someone else to file my application for registration as a Floor Broker or Floor Trader for me?
No. Applicants for registration as floor brokers or floor traders must file their own applications. Unlike AP applicants and individual principals, who must file a verification of the information in the application that their sponsor files for them, floor broker and floor trader applicants verify the accuracy of the information when they file their application.

If I am an individual applying for registration as an associated person or I am an individual who is a principal, can I file my own application?
No, your sponsor must file your application for registration as an AP and as a principal.

Can my firm let me fill out the application?
Yes. After the firm starts an application for you in ORS, a temporary UserID and password will be displayed online for the firm to give to you. You may use this to access your application and fill it out, but you will not be able to file it. After you are finished, you will need to inform your firm that your application is ready to be filed.

If I am an AP applicant or an individual who is a principal, do I need to verify the accuracy of the information contained in the application that the firm files for me?
Yes. After your sponsor files the application, using ORS, you will need to electronically file a verification of the information contained in the application. Your sponsor will provide you with the temporary UserID and password that you will need to access your application in ORS. If your firm already gave you a Temporary UserID and password to fill out the application, you will use them again to access the application, review the information and, if everything is correct, file the verification. However, if the applicant or principal is already pending, temporarily licensed, registered or approved, a verification is not required.

Why do I have to file a verification? Isn't my firm's submission of the application sufficient?
No. Sponsors are not required to keep hard copies of any electronic filings made in ORS and you are not required to manually sign a hard copy version of the application. Instead, the CFTC requires that an applicant must file the electronic verification in lieu of a manually signed, hard copy application form.

If the information in the application is not accurate, can I correct it and then file the verification?
No. You must tell your sponsor what information is not accurate and your sponsor must correct it by filing an update. After the sponsor has corrected any inaccuracies, it will notify you that you can access the application again and file the verification.

If I am an AP applicant or an individual who is a principal of a firm, can I authorize someone else to file the verification on my behalf?
No. You must file the verification. Even if someone else files the verification for you using your UserID and password, you are responsible for any inaccurate information. As a result, you may be disqualified from becoming registered because the application contains false information or omits information.

Are there different versions of the applications in ORS?
Yes. If the applicant or individual principal is already pending, temporarily licensed, registered or approved, there are "short" application paths that will request only any additional information needed to file the new application. The most common of these "short path" applications are registered APs applying as a principal or to be dually registered with another sponsor and principals applying to become an AP. Individuals filing "short path" applications do not need to submit fingerprint cards, pay fees or file a verification.

If I am already registered or a principal, do I ever have to file a complete application and verification in ORS instead of a "short" form?
Yes, but the only time that this will happen is the first application you file in ORS. NFA is requiring this to make sure it has complete and accurate data, especially answers to the Disciplinary Information questions, which have changed.

Besides the information requested in the Online Registration System, are there any additional filing requirements I need to be aware of?
Yes. Additional filings include the following:

FCMs and IBs
All applicants for registration as an FCM must file certain financial statements and other documents. NFA must receive from an FCM applicant either an audited financial report within 45 days of the statement date or an audited financial report within one year of the statement date and an unaudited financial report within 17 business days of the statement date.

An applicant for registration as an IB must file either financial statements and other documents or a guarantee agreement. NFA must receive the IB's audited statement within 45 days of the statement date or an audited financial report within one year of the statement date and an unaudited financial report within 17 business days of the statement date. Instead of filing an audited statement, an IB applicant, except those switching from guaranteed to independent status, may file only an unaudited financial report. NFA must receive the unaudited financial report within 17 business days of the statement date. An IB applicant that files only an unaudited financial statement will be subject to an on-site review by NFA within six months of its registration date. NFA may still require an applicant to file an audited financial report before accepting an independent IB for Membership.

For the purpose of preparing such reports, the applicant may use Form 1-FR-FCM or Form 1-FR-IB (Part A) or a SEC FOCUS Report (if the applicant is registered with the SEC as a broker/dealer). The audited Form 1-FR-FCM or Form 1-FR-IB (Part A) or SEC FOCUS Report must be accompanied by an auditor's opinion covering all required statements and an auditor's Report on Internal Control. In addition, an oath or affirmation must be accompanied with the statements that to the best knowledge and belief of the individual making such oath or affirmation the information contained in the statements are true and correct. If the applicant is a sole proprietorship, then the oath or affirmation must be made by the proprietor; if a partnership, by a general partner; or if a corporation, by the chief executive officer or chief financial officer.

Note: If you are required to file Form 1-FR-FCM or Form 1-FR-IB (Part A) or if you elect to file an SEC FOCUS Report, refer to NFA Financial Requirements in the NFA Manual. NFA suggests that you contact your accountant in advance to arrange for advice and assistance.

FORM 1-FR-FCM — DETAILED FINANCIAL REPORT: This form must be filed by all persons or organizations applying for registration as an FCM.

FORM 1-FR-IB (PART A) — DETAILED FINANCIAL REPORT: This part must be filed by all persons or organizations applying for registration as an Independent IB.

FORM 1-FR-IB (PART B) — GUARANTEE AGREEMENT: Persons or organizations that are IBs or that are applying for registration as IBs may file Part B in lieu of Part A. The Guarantee Agreement must be signed by an officer, general partner or sole proprietor of both the IB and the FCM that will carry accounts of the IBs customers. The Guarantee Agreement, in effect, obligates the FCM to assume financial and regulatory responsibility for the performance of the IB in connection with futures and options customers. The IB has no further financial reporting obligations as long as the Guarantee Agreement remains in effect.

Statement of Source of Current Assets: All applicants for registration as an FCM or Independent IB must submit a letter written on the applicant's business stationery describing the source of its current assets and representing that its capital has been contributed for the purpose of operating the business for which they are applying for registration and will continue to be used for that purpose. The letter must be signed by a principal of the firm.

APs, FB/FTs and Principals
Applicants for registration as an AP or designation as a Branch Office Manager or Principal must file a verification of the information contained in the application and submit a fingerprint card. It may also be necessary for NFA to receive evidence from FINRA that the applicant has passed a proficiency examination. Floor broker and floor trader applicants must file a fingerprint card. AP, FB and FT applicants, Branch Office Managers and principals who are already pending, temporarily licensed, registered or approved are not required to file the fingerprint card.

Fingerprint cards are sent to the Federal Bureau of Investigation (FBI) to determine if the applicant has a criminal record. To match a fingerprint card with an individual FBI file the FBI must be able to analyze the print pattern of all 10 fingers. If the pattern of any one finger is not legible and the match cannot be made, the FBI will return the fingerprint card to NFA and NFA will have to delay processing until a new fingerprint card is obtained. For this reason it is very important that you have your fingerprints taken by a person properly trained in rolling fingerprints.

NFA has issued a Registration Advisory that provides guidance concerning fingerprinting to assist those who submit applications via the Online Registration System.

Applicants are encouraged to submit more than one set of fingerprints with their application to avoid delays in obtaining additional sets if necessary for processing.

Documents related to Disciplinary Information
The Disciplinary Information questions require applicants to disclose any facts about their backgrounds that might indicate disqualification. Applicants must supply explanations and certified copies of the actual official papers relating to"yes" answers. Two things must be kept in mind. First, willfully giving a false answer to one of the Disciplinary Information questions is a crime and a sufficient reason in itself for denying registration. Second, it is always in an applicant's best interest to support any "yes" answers with complete explanations and official documents. In the case of a "yes" answer, registration cannot be granted unless the nature of the potential disqualification is fully understood and supported by the appropriate documents.

Application Fees
The applicable application fee must be paid. AP, FB and FT applicants and principals who are already pending, temporarily licensed, registered or approved are not required to pay the fee.

How long after my application is filed do I have to submit the rest of the required information?
Once the firm files an electronic Form 7-R for itself or an electronic Form 8-R for an AP or principal, the applicant will have 90 days to clear up any deficiencies in the application. If the deficiencies are not cleared up within 90 days, the application will be withdrawn and a new application will need to be filed. Applications for registration as an FB and FT will be withdrawn if any deficiencies are not cleared up within 180 days. AP Temporary Licenses will be withdrawn if the verification, fingerprint cards, evidence of test passage and the fee are not received by NFA within 20 days.

Do sole proprietors need to complete both the firm and individual applications?
Yes, a sole proprietor, i.e., an individual who intends to act as an FCM, IB, CPO or CTA, is considered to be a firm, not an individual. Therefore, a sole proprietor applicant must file the electronic Form 7-R for the sole proprietorship and the electronic Form 8-R to list the sole proprietor as a principal or to become an AP of the firm. The sole proprietor must also file the electronic verification of the Form 8-R.

Which individuals are considered principals?
An individual's status as a principal is determined by the individual's 1) ability to control a registrant's business activities; 2) formal title or position with the registrant; and 3) financial or ownership interest in the registrant. Individuals who, through their conduct or activity, directly or indirectly control a registrant are principals of the registrant, irrespective of their formal title or financial interest in the registrant. Similarly, individuals who hold specific positions or titles with registrants (see definition of principal) are also principals of the registrant, irrespective of their ability to control the registrant's business.

Individuals who, directly or indirectly, have a 10% or more financial or ownership interest in the registrant are principals of the registrant, irrespective of their titles, position or ability to control the registrant's business activity. The following examples illustrate how direct and indirect ownership impact an individual's status as a principal based on ownership.

• Example 1: Individual owns 100% of any class of stock of Registrant. Individual is a principal of registrant.
  
• Example 2: Individual owns 100% of Holding Company's stock and Holding Company owns 50% of Registrant's stock. Individual is a principal because Individual indirectly owns 50% of Registrant's stock (100% x 50%=50%).
  
• Example 3: Individual owns 100% of Holding Company A's stock. Holding Company A owns 50 % of Holding Company B's stock. Holding Company B owns 50% of Registrant's stock. Individual is a principal of Registrant because Individual indirectly owns 25% of Registrant's stock (100% x 50% x 50%=25%).
  
• Example 4: Individual owns 50% of Holding Company's stock. Holding Company owns 10% of Registrant's stock. Individual is not a principal of Registrant (based on ownership interest) because Individual indirectly owns 5% of Registrant's stock (50% x 10%=5%).

Which companies are considered principals?
A company is a principal either because it is a general partner of a partnership or based on its ownership or financial stake in a registrant. Unlike individuals, a company's status as a principal based on ownership or capital contribution is determined solely by its direct relationship with the registrant. Holding companies that directly own 10% or more of a class of a registrant's stock or directly contribute 10% of a registrant's capital are principals of the registrant. In contrast, a holding company that indirectly owns a registrant's stock or contributes capital is not a principal. The following example illustrates how direct and indirect ownership impact a company's status as a principal of a registrant.

• Example 1: Holding Company A owns 100% of Holding Company B's stock. Holding Company B owns 50% of Registrant's stock. Holding Company B is a principal of Registrant because Holding Company B directly owns 50% of Registrant's stock. Holding Company A is not a principal of Registrant because although it indirectly owns 50% of Registrant's stock (100% x 50%=50%), it does not directly own 10% or more of Registrant's stock. The same would be true regarding capital contributions.

How do I withdraw my firm's registration or application for registration?
Registrants and applicants for registration must file Firm Withdrawal Request (Form 7-W) in ORS to withdraw their registration or application.

How do I terminate an AP, Branch Office Manager or Principal?
The sponsor must file an electronic Individual Withdrawal Notice (Form 8-T) to terminate any of its APs, Branch Office Managers or individual principals who are pending, temporarily licensed, registered or approved. Broker-dealers may no longer file a Form U-5 in lieu of the Form 8-T; however, they may elect to complete and file the U-5 disciplinary questions as part of the Individual Withdrawal Notice in ORS. The sponsor that files the individual Withdrawal Notice must promptly provide a hard copy version to the person whose association has been terminated. This is particularly important for APs who are moving to a different sponsor and who wish to engage in Security Futures Products transactions. The new sponsor must review the AP's most recent Form 8-T or U-5 and the AP must provide a copy of it to the new sponsor on request. An Individual Withdrawal Notice must be filed within 30 days of the termination of an AP, principal or branch office manager. A fee of $100 will be charged for a termination notice received more than 30 days after the actual termination date.

As a floor broker and floor trader, can I use the Online Registration System to withdraw my registration?
No, FBs and FTs must request to withdraw their registration using a hard copy version of Form 8-W. You may download a copy of this form from NFA's web site and submit it to NFA's main business address. The withdrawal will become effective 30 days from the date NFA receives the request and required attachments unless the CFTC or NFA denies, conditions, postpones or expedites the withdrawal. Individuals who no longer have granted trading privileges on any designated contract market or derivative transaction execution facility ("DTEF") should not file this form. FB and FT registration terminates automatically once NFA is notified that an individual no longer has trading privileges on any contract market or DTEF.

If my firm is not based in the United States, what requirements does it have?
Foreign entities that transact business with U.S. customers in the capacity of an FCM, IB, CTA or CPO are generally required to register in the appropriate category. Foreign entities must meet the same filing requirements as domestic applicants. In addition each foreign entity that files an electronic Form 7-R agrees to make its books and records available for inspection by NFA and the CFTC.

Persons required to be registered as an FCM must maintain an office in the United States which is managed by an individual who resides in the U.S. and who is registered with the CFTC as an AP.

Foreign entities that transact business directly with U.S. customers solely in futures contracts and commodity options traded on foreign exchanges are exempt from registration if:

(a) it is an FCM subject to a comparable regulatory structure by a foreign regulator which has been granted an exemption by the CFTC or an IB, CPO, or CTA without a U.S. office; and

(b) it has filed a request for exemptive relief and an agreement with NFA appointing an authorized U.S. agent for service of process for communications in connection with activities that would otherwise require registration.

Who is required to register and why?
With certain exceptions, all persons and organizations that intend to do business as futures professionals must register under the Commodity Exchange Act (Act). The primary purposes of registration are to screen an applicant's fitness to engage in business as a futures professional and to identify those individuals and organizations whose activities are subject to federal regulation. In addition, persons may, in order to conduct business as futures professionals, be required to become Members or Associates of NFA.

Click on the links below to obtain specific information to help you determine whether, by law, you are required to seek CFTC registration and if so in what category. If you have any questions as to whether you qualify for a particular exemption from registration, you should seek guidance by referring to the appropriate section of the Act or by consulting NFA registration personnel. Requests for exemption or for "no action" opinions with respect to the applicable registration requirements should be submitted to the CFTC and a copy of any such request should be provided to NFA.

Futures Commission Merchant, Introducing Broker, Commodity Pool Operator, Commodity Trading Advisor, Associated Person, Principal, Floor Broker or Floor Trader, NFA Membership

What is a fitness inquiry?
The Act specifies certain disqualifications from registration, including many that are based on prior proceedings in which the applicant was found to have violated the law or in which the applicant was formally enjoined from engaging in certain activities. NFA performs an extensive background check to determine whether a disqualification exists. Three essential elements of the background check are the Disciplinary Information questions on the application forms that require the applicant to disclose and supply detailed information concerning possible disqualifications, a check against FINRA's CRD database and the fingerprint cards provided by individuals. For foreign applicants, NFA may perform additional background checks such as checks with foreign regulatory and self-regulatory bodies and Interpol.

How long does the registration process take?
Initial applications for registration as a Futures Commission Merchant, Introducing Broker, Commodity Pool Operator, Commodity Trading Advisor, Associated Person, Principal, Floor Broker or Floor Trader and for NFA Membership can be filed once entry of the required data is complete. APs who are eligible will receive a temporary license as soon as the application is filed. Guaranteed IBs that are eligible will receive a temporary license as soon as all required filings have been made for it and its principals. However, it may take six to ten weeks to complete all background checks before NFA can grant a full registration to initial applicants.

If an individual is already registered or listed as a principal, it is possible to obtain registration in a new category as soon as the application is filed. For example, an individual who is listed as a principal, has no fitness information that needs to be reviewed and has satisfied the proficiency requirements can be registered as an AP when the application is filed. Similarly, a registered firm may be able to obtain registration the next day. For example, a registered IB with no disciplinary information to be reviewed that files an application to be registered as a CTA will be registered as a CTA overnight if there is sufficient funds in its prepaid account to cover the application fee.

What is a prepaid account?
Any Commodity Pool Operator, Commodity Trading Advisor, Futures Commission Merchant or Introducing Broker can establish a prepaid account with National Futures Association. No minimum balance is required. The prepaid account can be used for payment of:

• Principal, AP registration and special registration filing fees
• Additional firm registration filing fees
• Initial NFA membership dues
• Fees for late 8-T filings
• Annual registration records maintenance fees
• Annual NFA Membership dues^*
• Fingerprinting by NFA staff^*
• Purchase of directories^*

Account statements can be viewed online at any time, reflecting the account balance and all activity by month and year. For the time being, hardcopy statements are also mailed monthly.

To open a prepaid account, send a check and cover letter with instructions to set up a prepaid account to NFA at the address below. Please include the name and NFA ID number of the firm for which the prepaid account is being established.

Treasurer's Office
National Futures Association
Post Office Box 98383
Chicago, Illinois 60693-0001

To add money to a prepaid account, send a check to the above address. Include a cover letter with instructions to add the amount to the prepaid account. As always, please include the firm name and NFA ID number.

To close a prepaid account, send a letter requesting a refund of the account balance to the address below. NFA will mail a check for the balance in the prepaid account within 10 business days after NFA receives the request.

Treasurer's Office
National Futures Association
300 South Riverside Plaza
Suite 1800
Chicago, Illinois 60606-6615

How do I update registration information for me or my firm?
Firms, floor brokers and floor traders will update their own registration information and firms will update the registration information of their APs and principals by filing an Update (Form 3-R) in ORS. To do this, they will access the specific "update" web pages that contain the information that they wish to change and enter and file the new information. These "update" web pages are essentially the pages from the Form 7-R and Form 8-R.

Can a firm notify NFA that it has changed its form of organization by filing an update online?
In most instances, firms may notify NFA of a change in form of organization by filing an Update. If a firm reports a change in the form of organization by filing an Update, the newly formed organization will be liable for all obligations of the pre-existing organization. However, firms cannot file an Update to report a change to or from a sole proprietorship. In these instances, the firm needs to file an electronic application (Form 7-R) for the newly formed organization and a Firm Withdrawal Request (Form 7-W) for the pre-existing organization.

Who must be a Member of NFA?
In general, all FCMs, IBs, CPOs and CTAs that are required to be registered with the CFTC and that conduct a futures-related business with the public must be Members of NFA. NFA Members may not conduct customer business with any entity that is not an NFA Member unless that non-Member entity is specifically exempt from CFTC registration requirements. Individuals who act as APs of NFA Members must be NFA Associates.

Are there any firms or individuals who must be registered but do not need to be a Member of NFA?
Yes. Notice Registered FCMs and IBs; ATMs and their affiliated individuals; CTAs that do not manage or exercise discretion over customer accounts; floor brokers and floor traders; and principals do not need to be NFA Members.

How do I apply for NFA membership?
Firms must file an electronic application for NFA membership in ORS. This can be done at the same time that the firm applies for registration or separately. AP applicants automatically apply to be Associates as part of the AP registration application process.

Is approval of the application for NFA membership automatic?
No, applicants for NFA membership or Associate status must meet fitness standards similar to those that apply to applicants for registration. Usually though, if the applicant is granted registration, the membership or associate status is also approved.

Persons whose CFTC registration has been revoked or suspended (if the suspension is still in effect) may be deemed disqualified for NFA membership. So may persons who have been refused CFTC registration, persons who have been enjoined by court order from doing business as futures professionals and persons who have been convicted of a felony or certain misdemeanors. These and other grounds for denial are listed in the NFA Manual (See Bylaw 301(c), "Restrictions on Becoming or Remaining a Member or Associated with a Member").

Applicants which are denied membership have the right to appeal the denial-and, in some cases, if they request, to have a hearing before the Membership Committee-in order to demonstrate that they meet requirements for membership. These procedures are likewise contained in the NFA Manual (See Bylaw 301(g)).

How much are NFA's Annual Dues?

MULTIPLE REGISTRATION
Applicants that are registered with the CFTC (or that have applied for CFTC registration) in more than one category are required to pay NFA annual dues only in the category for which the annual dues is highest regardless of principal business. For example, if a firm is registered with the CFTC as both an FCM and a CPO, it would only be required to pay NFA dues as an FCM.

MEMBERSHIP ANNUAL DUES SCHEDULE

Futures Commission Merchant (exchange member):	$1,500
Futures Commission Merchant (non-exchange member):	$5,625
FCM Forex Dealer Member - Exchange Member with annual forex revenue of $500,000 or less: *	$45,875
FCM Forex Dealer Member - Exchange Member with annual forex revenue of more than $500,000 but not more than $2 million: *	$70,875
FCM Forex Dealer Member - Exchange Member with annual forex revenue of more than $2 million, but not more than $5 million: *	$95,875
FCM Forex Dealer Member - Exchange Member with annual forex revenue of more than $5 million: *	$120,875
FCM Forex Dealer Member - Non-Exchange Member with annual forex revenue of $500,000 or less: *	$50,000
FCM Forex Dealer Member - Non-Exchange Member with annual forex revenue of more than $500,000 but not more than $2 million: *	$75,000
FCM Forex Dealer Member - Non-Exchange Member with annual forex revenue of more than $2 million, but not more than $5 million: *	$100,000
FCM Forex Dealer Member - Non-Exchange Member with annual forex revenue of more than $5 million: *	$125,000
Commodity Pool Operator:	$750
Commodity Trading Advisor:	$750
Introducing Broker:	$750

* FCM Forex Dealer Member dues will be assessed on membership renewal date; regular FCM dues apply to initial application.

FCM FOREX DEALER MEMBER ANNUAL FEE:
Bylaw 1301 also requires FDMs to pay an annual fee based on the highest number of unregulated solicitors and account managers that they were responsible for at any given time for the 12 month period preceding the Members' annual dues notice. The following table lists the fee levels.

Number of Unregulated Entities	Annual Fee
0	$         0
1-4	$  5,000
5-19	$10,000
20-99	$25,000
100 or more	$50,000

Can I take the proficiency examinations without a sponsor?
Yes.

How do I sign up to take the futures proficiency examinations?
You should send a Form U10, along with the appropriate fee, to the Financial Industry Regulatory Authority (FINRA). You may download the form from the FINRA. FINRA administers the exams on behalf of NFA at Sylvan Prometric Centers.

Are study materials available to help prepare for the proficiency examinations?
NFA's Study Outline for Futures Industry Examinations provides guidance or you may contact NFA's Information Center staff at (312) 781-1410 or (800) 621-3570.

Can an applicant for registration file an application without proof of having passed the proficiency examinations?
Yes, but the NFA will need to receive evidence from FINRA that the applicant has passed a proficiency examination before registration can be granted. Under the temporary licensing rules, a temporary license that had been granted pending receipt of the proficiency examination results will be withdrawn if the results are not received within 20 days of the filing of the application.

What is a temporary license?
Temporary licenses allow applicants to conduct business in the registration capacity for which they have applied while NFA is conducting the required background checks. NFA grants temporary licenses to applicants for registration as Associated Persons, Floor Brokers, Floor Traders or Introducing Brokers if they meet certain conditions.

Can I receive an AP TL with more than one sponsor?
Yes, an AP can have TL's with more than one sponsor. This could occur if an AP has a TL with one sponsor and a second sponsor files an application for the AP to be associated with it as well. The same will be true if the individual is applying to be both an AP and a FB/FT. If the applicant is otherwise eligible, the fact that the applicant already has one TL will not prevent the applicant from obtaining additional TLs.

How do I receive a temporary license to act as an AP?
AP applicants who are eligible will receive a TL online after the sponsor files the electronic Form 8-R. The AP must file the verification and NFA must receive the fingerprint cards, the registration fee and, if applicable, evidence from FINRA that the applicant has passed a proficiency examination within 20 days after the sponsor files Form 8-R. If NFA does not receive any of these items within the 20 days, the TL will be withdrawn.

How do I receive a temporary license to act as a guaranteed IB?
NFA will grant a TL to a guaranteed IB after all the filings have been made for the IB and all of its individual principals and NFA determines that the IB and all of its individual principals meet the eligibility requirements for obtaining a TL. The FCM that guarantees the IB must also file its certification before the TL can be issued.

How do I receive a temporary license to act as a floor broker or floor trader?
Eligible FB/FT applicants will receive a TL after electronically filing the Form 8-R in ORS, submitting fingerprint cards, paying the required fee and obtaining trading privileges.

If I receive a temporary license as a floor broker, can I accept customer orders?
Yes.