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February 02, 2006
Annual Regulatory Reminder for Commodity Trading Advisors
National Futures Association has always been committed to providing our Members with the resources they need to meet their regulatory obligations as efficiently as possible. During some of our recent audits, NFA Members have suggested that we provide them with an annual reminder regarding certain requirements that are not part of their day-to-day operations. Responding to this request, NFA is pleased to send you this email listing certain requirements you have for the upcoming year. This list does not capture all of your responsibilities, but it should help remind you of certain non-routine requirements.
Within the next 12 months you will be required to:
1. Complete the Annual Update/Questionnaire on NFA's website and pay your NFA dues on the anniversary date of your firm's registration. Failure to satisfy all the requirements in the annual update process within 30 days of your anniversary date will result in the withdrawal of your firm's NFA registration and/or Membership.
2. Complete NFA's Self-Examination Checklist located on NFA's Web site at http://www.nfa.futures.org/compliance/selfexam.asp [hyperlink updated 12-01-2021].
4. Test your Disaster Recovery Plan and make any necessary adjustments. For guidance in preparing your plan, please consult NFA's Business Continuity and Disaster Recovery Plan questionnaire (Appendix B of the Self-Exam Checklist).
5. Provide Ethics Training as outlined in your firm's written Ethics Training Procedures. For guidance in developing your procedure, please consult NFA's Ethics Training Policy questionnaire (Appendix C of the Self-Exam Checklist).
6. If soliciting new clients, distribute a Disclosure Document that is no more than 9 months old and that has been reviewed by NFA.
7. If placing bunched orders, analyze each trading program at least quarterly to ensure that the order allocation method has been fair and equitable and document this analysis.
On January 31, 2006 NFA conducted a one-hour Web seminar entitled, "Preparing for an NFA Audit." During the seminar NFA staff gave an overview of the audit process, shared some tips on how to prepare for an audit and discussed some of the most common deficiencies found by NFA auditors. You may access the seminar at http://www.nfa.futures.org/member/indexArchive.asp.