Below is a summary of just some of the important requirements for Introducing Brokers.  Note this does not reflect all IB responsibilities:

Cybersecurity (ISSP).  On an annual basis, the information systems security program must be reviewed and updated.  NFA/CFTC updates the guidance for ISSPs on an ongoing basis.  IB Members must adopt and enforce procedures to secure both customer data and access to their electronic systems.  As of April 1, 2019 any significant data breaches must be reported to NFA.  For a more detailed list of updates and changes that go into effect April 1, click here.

Annual Dues.  On or before the anniversary of registration, dues must be paid. If an IB has an additional category of membership, there is a $100.00 additional maintenance fee required.

Annual Questionnaires.  On or before the IB registration anniversary date the Annual Questionnaire must be completed.  Also, the Annual Registration Update must be completed.  Moreover, the Self-Exam Questionnaire must be filled out and submitted.  We recommend reviewing the self exam questionnaire as a guide to make sure all procedures remain in compliance.  The Self-Exam Questionnaire can be reviewed here.

Reports & Exemptions.  The IB Privacy Policy must be distributed to all current participants (this is part of Appendix D of the Self-Exam Questionnaire). Financial reports must be submitted to NFA via the NFA’s EasyFile System.  Here is a list of the annual required reports (applicable to Independent Introducing Brokers specifically):

• Audited Financial Report including 1-FR-IB, due 90 days after fiscal year end. For example, if the IB fiscal year end is December 31, 2018, the annual audit is do on or before April 1, 2019.
• Semi-annual 1-FR-IB due in the middle and at the close of the fiscal year.  This is due within 17 days of period end.
• NFA Questionnaire – as noted above
• Net capital computations. Due on a monthly basis and must be completed within 17 business days of month end
• Additional requirements may require reporting.  Click here for more details.

Supervision. This is a key focus of NFA we have found in recent NFA Audits.  Supervision of not only employees and APs is critical, but of branch offices in different locations as well.

Testing & Training.  Testing plans and procedures as well as on-going training is a must.

• Test your disaster recovery plan
• Provide ethics training as outlined in procedures
• Conduct AML training as well as complete the required annual AML audit (must be done within a 12 month period)

We provide reviews and updates to procedures as well as Mock NFA Audits.  If you feel this service is needed and we can help get your compliance house in order, contact us today!

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You may also be interested in:

• Introducing Broker Annual Requirements & Deadlines
• Compliance Checkup – Annual Introducing Broker Requirements
• Broker Dealers: Update Compliance Program