Annual FCM Requirements
Below is a listing of certain annual requirements for futures commission merchants (FCM). This list serves as a reminder of certain yearly requirements and does not reflect all FCM responsibilities.
Cybersecurity
- Review the FCM's written information systems security program (ISSP) using either in-house staff with appropriate knowledge or by engaging an independent third-party information security specialist.
- Provide training to employees upon hiring, at least annually thereafter, and more frequently if circumstances warrant.
Dues
- Pay NFA dues (including a $100 registration records maintenance fee for each category of registration) on the FCM's registration anniversary date.
Questionnaires and Updates
- Complete NFA's Annual Questionnaire on the FCM's membership anniversary date using NFA's Annual Questionnaire system.
- Complete the electronic Annual Registration Update in NFA's Online Registration System (ORS) when notified through NFA's Dashboard.
- Complete NFA's Self-Examination Questionnaire.
Reports and Exemptions
- Send the FCM's Privacy Policy to participants. See Appendix D of the Self-Examination Questionnaire for details.
- Review your Point of Contact information for USA PATRIOT Act 314(a) information requests and notify NFA of any changes.
- Contact active customers who are individuals, at least annually, to verify that the information obtained from that customer under NFA Compliance Rule 2-30(c) remains materially accurate, and provide the customer with an opportunity to correct and complete the information. If the customer notifies you of any material changes to the information, assess whether additional risk disclosure is required to be provided to the customer based on the changed information. However, if another FCM or IB introduces the customer's account on a fully disclosed basis or a CTA directs trading in the account, then notify that Member of the changes to the customer's information.
- Designate a Chief Compliance Officer (CCO) and ensure that person is listed as a principal of the FCM. The CCO is required to prepare an annual report and provide the report to the firm's senior management or the Board of Directors.
- If offering FOREX to retail customers, provide written information regarding NFA's Background Affiliation Status Information Center (BASIC), including the website address, to every current customer and to every new customer when the customer opens an account.
- If offering FOREX to retail customers, review the security, capacity, credit and risk-management controls, and records provided by your electronic trading systems and certify that the requirements outlined in NFA Interpretive Notice to Compliance Rule 2-36(e) have been met. Prepare a certification, signed by a principal who is also a registered associated person (AP), and provide a hardcopy to NFA with the submission of your annual audited financial statement.
- Engage a certified public accountant to perform an audit of the firm's year-end financial statements (certified financial report).
Supervision
- Supervise the operations of any guaranteed introducing brokers (GIB) and/or Branch Offices and conduct an annual onsite inspection of every GIB and Branch Office.
Testing and Training
- Test the disaster recovery plan and make necessary adjustments.
- Provide ethics training as outlined in the FCM's written ethics training procedures.
- Conduct anti-money laundering (AML) training for relevant employees and complete an audit of AML procedures and training.