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March 01, 2019
Regulatory requirements reminder for FCM, FDM and IB Members
NFA is committed to providing its Members with the resources they need to meet their regulatory obligations as efficiently as possible. This Notice serves as a reminder that Members can access information detailing annual and ongoing requirements from the Members section of NFA's website.
Futures commission merchants (FCM)
Forex dealer members (FDM)
Introducing brokers (IB)
On a yearly basis, each NFA Member must complete the annual update process on the anniversary of its membership date. This process includes completing the Annual Questionnaire, as well as paying membership dues. If this process is not completed within 30 days of a Member's anniversary of its membership date, NFA will treat this as a request to withdraw the firm from NFA membership and/or CFTC registration. Updating the Annual Questionnaire also ensures that Members receive Notices applicable to their business operations.
Additionally, NFA Members must annually review their operations using NFA's Self-Examination Questionnaire. This questionnaire is designed to aid Members in recognizing potential problem areas and to alert them to procedures that need to be revised or strengthened.
On an ongoing basis, each NFA Member must update its Annual Questionnaire in the event of a material change to its operations. For example, if a Member begins soliciting for virtual currency derivatives or begins doing business, the Member must immediately update its Annual Questionnaire. Doing so ensures that NFA's BASIC system displays correct information about the firm's business activities and ensures the firm receives all applicable notices relating to its reporting requirements in a timely manner.
Each NFA Member must also keep its Form 7-R up-to-date. The Form 7-R includes, among other information, the firm's address, contact information and listed principals and can be accessed using NFA's Online Registration System (ORS).
Additional reminders for FCM and IB Members
- FCM and IB Members must ensure that their Anti-Money Laundering Programs include procedures for conducting ongoing customer due diligence and verifying beneficial owners for legal entity customers as outlined in Interpretive Notice 9071. Firms that rely on other financial institutions to identify and verify beneficial owners of legal entity customers must establish or update existing contracts to incorporate the requirements that will be performed by the other financial institution.
- FCMs and IBs engaging in virtual currency activities must provide disclosures to customers as outlined in Interpretive Notice 9073.
- Only firms whose regulated activity is limited to swaps may claim to be Swaps Exclusive on the Form 7-R. Otherwise, the firm's APs must pass the Series 3 exam.
- Failure to pay late fees within 30 days of the due date will result in the withdrawal of the firm's registration and/or membership.
If you need assistance with any NFA requirements, please contact NFA's Information Center (312-781-1410 or 800-621-3570 or firstname.lastname@example.org).