Non-exempt Commodity Pools must submit a certified audit on an annual basis to the National Futures Association. The audit must be completed by an independent certified public accountant. The auditor cannot be the same as the pool accountant.
The audit needs to be submitted no later than 90 days from year end. For example, if a commodity pool has a fiscal year end of December 31, the audit must be submitted no later than March 31. If March 31 falls on a weekend, the audit must be submitted no later than the next business day. For example, March 31, 2018 falls on a Saturday. Therefore, the annual audit is due to NFA by midnight on April 2, 2018.
Hedge Funds are not always required to submit annual audits to a regulatory body. However, Hedge Fund managers are required to follow the procedures and meet the expectations set forth in their Private Placement Memorandum (PPM). If investors require an audit on an annual basis per the PPM, this must be performed by an independent auditor and shared with all partners.
Commodity Pools and Hedge Funds should review the following on an annual basis and document that such review has taken place. Below is an example of said compliance checklist:
To be completed at least annually by the compliance officer:
_____ Check on line NFA registration records to make sure they are current (CPO)
_____ NFA Annual Questionnaire – completed (CPO}
_____ Signed Annual Self-Exam Checklist (NFA) on file (CPO)
_____ Ethics Training for new APs – within 6 months (CPO & Hedge Fund)
_____ Ethics Review for all APs – every 3 years
_____ Promotional Material Folder or log updated with applicable support
_____ Complaint Folder or log updated with applicable support
_____ Branch Office Procedures reviewed (if applicable)
_____ Branch Office Examinations – at least one every 12 months (if applicable) including a report of the examination to the branch office
_____ Disaster Recovery Procedures reviewed
_____ Privacy Policy reviewed
_____ Privacy Policy distributed to non-institutional clients within last 12 months
_____ Written Operational Procedures (incorporated in the written documents) reviewed and agree with actual operations and Disclosure Document
_____ Cybersecurity policy (ISSP) reviewed/updated – annually
_____ Annual audit filed with NFA within 90 days (or by an approved extension date) of your fiscal year end (CPO}
_____ Quarterly financial reporting through NFA Easy File (CPO)
_____ Monthly account statements to investors with appropriate affirmation
_____ Supporting documentation assessable for performance calculations
____ Bylaw 1101 compliance records
____ Blue Sky compliance?
____ Sales emails periodic review for appropriateness and compliance with regulations.
____ General Partner financial records reviewed for appropriate disbursements
_____ Updated disclosure document approved by NFA every 12 months if actively soliciting accounts
____ Reaffirmation of exemptions (if applicable)
Completed by:
Date completed: