Oct 31, 2017 | News

Commodity Pool and Hedge Fund Audit Due Date and Compliance Check Up

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: