On February 10th, the National Futures Association (NFA) published three Notices to Members identifying common deficiencies noted in examinations of commodity pool operators (CPOs), commodity trading advisors (CTAs), futures commission merchants (FCMs), forex dealer members (FDMs), introducing brokers (IBs), and swap dealers (SDs).
This blog post summarizes these notices and the identified deficiencies.
In addition, we have prepared A Summary of Deficiencies Found in NFA Exams February 2020 to supplement the information presented in this blog post.
On February 10, 2020, the NFA published the following three Notices-to-Members, which provided information about common deficiencies noted during recent examinations of NFA Member firms:
- Notice to Members I-20-05 (Common deficiencies of CPOs and CTAs);
- Notice to Members I-20-06 (Common deficiencies of SDs); and
- Notice to Members I-20-07 (Common deficiencies of FCMs, FDMs, and IBs).
According to the NFA, cybersecurity deficiencies were common to every type of Member firm.
In addition, the NFA identified deficiencies in specific areas applicable to each particular type of Member firm:
- CPOs – Calculation of financial ratios, delivery of required notices to pool participants and the CFTC and NFA, completion of self-examination questionnaires, and adequacy of supervisory programs.
- CTAs – Calculation of financial ratios and completion of self-examination questionnaires.
- FDMs – Completion of self-examination questionnaires.
- FCMs – Anti-money laundering program administration, notices to the NFA via Winjammer (TM), and completion of self-examination questionnaires.
- IBs – Anti-money laundering program administration and completion of self-examination questionnaires.
- SDs – Business conduct standards, adequacy of supervisory programs, and swap data reporting.
We have prepared A Summary of Deficiencies Found in NFA Exams February 2020 to supplement the information presented in this blog post.
Each Notice to Members is available here.
Good day. Good to know where an SRO will be looking for your A-game. DR2