Requirements for FCM, RFED and FDM Applicants FAQs

An FCM/RFED applicant must file either:

1) a certified financial statement as of a date no more than 45 days before it is filed or

2) a certified financial statement as of a date no more than one year before it is filed and an uncertified financial statement as of a date no more than 17 business days before it is filed.

Yes. An independent IB must file financial information and copies of its policies and procedures. A guaranteed IB must file a guarantee agreement and copies of its policies and procedures. 

An independent IB must maintain adjusted net capital of at least $45,000 but may introduce business to any registered FCM/RFED.  A guaranteed IB does not have to maintain a particular level of net capital but, instead, is guaranteed by a particular FCM/RFED and is generally required to introduce all its business to that FCM/RFED.

Instead of filing financial statements, a guaranteed IB must file a completed guarantee agreement between the IB and an FCM/RFED.

An applicant must file either:

1) a certified financial statement as of a date no more than 45 days before it is filed,

2) a certified financial statement as of a date no more than one year before it is filed and an uncertified financial statement as of a date no more than 17 business days before it is filed, or

3) an uncertified financial statement as of a date no more than 17 business days before it is filed.

If an IB applicant chooses the third option, however, NFA will conduct an examination within six months after the firm is registered, or NFA may require the applicant to file a certified financial statement before its registration becomes effective.

No. An applicant may file statements either electronically or in hard copy. After the firm's application has been approved, however, that requirement will change.

Yes. All applicants for registration as an FCM/RFED 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 it is applying for registration and that it will continue to be used for that purpose. The letter must be signed by a principal of the firm.

NFA encourages independent IB applicants to have at least $5,000 over their minimum net capital requirement and FCMs/RFEDs to be above the applicable early warning requirement. This gives the firm a cushion against falling below its capital requirement if it incurs unexpected liabilities.

Under NFA Compliance Rule 2-10(b), all FCMs and FDMs must:

(1) Maintain an office in the continental United States, Alaska, Hawaii, or Puerto Rico responsible for preparing and maintaining financial and other records and reports required by CFTC and/or NFA rules under the supervision of a listed principal and registered associated person of the FCM or FDM who is resident in that office; or

(2) If an FCM maintains an office in a jurisdiction that the CFTC has found to have a comparable regulatory scheme for purposes of Part 30 of the CFTC's rules and be subject to that regulatory scheme. This foreign office must be responsible for preparing and maintaining financial and other records and reports required by CFTC and/or NFA rules under the supervision of a listed principal and registered associated person of the FCM who is resident in that office.

The firm's pending registration status as an FCM/RFED or IB will be withdrawn if the firm fails to file its financial statement with NFA within 90 days after it applies for registration.