NFA Members are required to fully comply at all times with the rules and regulations of NFA and the CFTC. As a means of monitoring and assuring compliance, NFA conducts periodic examinations.
NFA generally notifies a Member of an upcoming examination shortly before the examination is scheduled to begin. FCMs and RFEDs which carry customer funds, and other Member firms at NFA's discretion, however, may be subject to unannounced examinations. While all NFA Members are subject to being examined, the timing and frequency vary depending upon a number of factors including the amount of money a firm has under management, customer complaints received, prior examination findings, or concerns noted during our review of Disclosure Documents or financial statements filed with NFA.
Because NFA tailors an examination to each firm's business operations, the amount of time to conduct an examination varies. Examiners try to minimize the disruption to the Member's operations; however, they must perform a certain amount of work at the Member's office, obtain representations from appropriate firm personnel and review firm documents. The best antidotes to a protracted examination are preparation and access to information.
NFA examiners communicate with the firm throughout the examination process. For example, if the examiners note any testing discrepancies or compliance deficiencies, they will immediately discuss them with the firm, giving the Member ample opportunity to work on correcting the problem.
Upon completion of their fieldwork, the examination team will conduct an exit interview, during which time they will recap the findings of the examination with an emphasis on any deficiencies noted and ways in which they can be corrected. They will also provide a written report subsequent to fieldwork.
NFA has several resources available to advise and assist Members in establishing and maintaining the required records. In addition to reviewing the NFA Manual and CFTC Regulations, you can find other valuable information contained in the resource section below.
NFA Members can file many of their required documents electronically.