NFA Members are required to comply with NFA Rules and CFTC Regulations. In order to monitor compliance, NFA conducts periodic examinations. While all NFA Members are subject to being examined, the timing and frequency of examinations vary depending upon:
- The amount of money the firm has under management;
- Customer complaints;
- Prior examination findings; or
- Concerns noted during the review of Disclosure Documents or financial statements filed with NFA.
NFA examinations are conducted in three phases:
Planning: NFA may contact the Member firm to announce an upcoming examination. Following any initial contact, a formal announcement, including the initial document request list, will also be sent via the Regulatory Filing System (RFS) or email.
Fieldwork: During this phase, you can expect NFA to:
- Interview key personnel;
- Review reports and documentation;
- Monitor firm operations; and
- Conduct an exit interview.
Fieldwork may be conducted in-person whereby NFA exam staff are physically present at the Member firm's office or entirely virtually, whereby exam staff conduct all aspects of the examination remotely from NFA's office. The length of in-person fieldwork will vary, depending on the nature of the examination, and may range from a day or two up to several weeks, and may be followed by additional work conducted from NFA's offices.
Reporting: Following fieldwork, NFA will
- Contact the Member for any follow-up questions or requests;
- Inform the Member of any additional findings; and
- Issue a written examination report.
NFA has resources available to assist Members in establishing and maintaining the required examination records.