SD Examinations

NFA Members are required to comply with NFA Rules and CFTC Regulations. In order to monitor compliance, NFA conducts periodic examinations.

Please note: Firms may not withhold documents or provide documents from which information is redacted without NFA's prior consent. Additionally, please be advised that it is NFA's longstanding policy not to recognize a claim of privilege (including attorney-client privilege) as a proper basis for withholding documents from NFA or redacting information from them.  Learn more.

NFA examinations are conducted in four phases:

Planning: NFA will contact the Member firm and announce an upcoming examination. Following the 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;
  • Assess firms' compliance with NFA rules and CFTC regulations; and
  • Conduct an exit interview.

Reporting: Following fieldwork, NFA will

  • Hold an Examination Closing Meeting to discuss findings; and
  • Issue a written examination report.

Remediation

Continuous Monitoring

To keep abreast of significant developments, areas of concern or changes taking place at SD Member firms, NFA monitors firms on an ongoing basis. This is an essential function of NFA's regulatory program given its risk-based approach to conducting examinations. 

Monitoring activities occur through a combination of attending periodic meetings with Chief Compliance Officers, reviewing reports submitted by SDs, and assessing specific developments and market events.

  • NFA conducts periodic meetings and phone interviews with SD Member firms.
  • The frequency of any subsequent meetings is driven by an assessment of the information obtained through NFA's monitoring activities.