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 quarterly reports 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, known as a First Day Letter, will also be sent.
Fieldwork: During this phase, you can expect NFA to:
- Interview key personnel;
- Review reports and documentation;
- Monitor firm operations; and
- Conduct an exit interview.
Reporting: Following fieldwork, NFA will
- Hold an Examination Closing Meeting to discuss findings; and
- Issue a written examination report.
NFA has resources available to assist Members in establishing and maintaining the required examination records.