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February 2, 2006
Annual Regulatory Reminder for Independent Introducing Brokers
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. Conduct Anti-Money Laundering ("AML") training for relevant employees and complete an audit of your AML procedures and training. For guidance in preparing your AML procedures, please consult NFA's Anti-Money Laundering questionnaire (Appendix A of the Self-Exam Checklist) [hyperlink updated 12-01-2021].
5. 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) [hyperlink updated 12-01-2021].
6. 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).
7. Supervise the operations of any Branch Offices, including conducting an annual onsite audit of every Branch Office.
8. If active in Security Future Products ("SFPs"), notify all SFP customers of NFA's BASIC system.
9. Submit a certified annual report within 90 days after the firm's fiscal year end. IBs that are also registered as BDs must submit the report within 60 days after the firm's fiscal year end.
1. Submit semi-annual 1-FR-IB filings via EasyFile within 17 business days of the date of the statement (in addition to completing and maintaining monthly net capital computations). IBs also registered as Broker Dealers may file via WinJammer and must also file with NFA all statements required by the NASD. All financial statements should be prepared using the accrual basis of accounting as required by Generally Accepted Accounting Principles.
2. If active in SFPs, submit a quarterly log of any written customer complaints regarding SFPs to NFA by the 15th of the next month. You do not have to file the report if you do not receive any SFP complaints during the quarter.
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.