Jun 12, 2014 | News

Introducing Broker Compliance Reminders

It is imperative for all Introducing Brokers to remain in compliance with current NFA regulations or face hefty fines.  We recommend the following be reviewed on a continuous or annual basis:

  • Anti-Money Laundering Review must be conducted independently every 12 months
  • Conduct Ethics training on a regular basis especially for new APs
  • Monthly Net Capital Review
  • Branch Office Procedure Review on an annual basis
  • Search current and potential customers against Office of Foreign Assets Control (OFAC) database
  • Send Updated Privacy Policy to all customers on an annual basis
  • Make sure FCM Reliance Agreement is in place and updated every 12 months
  • Make sure NFA Questionnaire is updated and filled out annually
  • Review all Procedures to make sure they are current with NFA regulations

Also, if IIBs fall below the Net Capital Requirement at any point in time, it is required that you file notice with NFA  and file a 1FR within 24 hours.  There may be fines assessed by NFA when an IIB falls below the minimum net capital requirement.  It is required that Net Capital Computation records be maintained on a monthly basis.   However, we recommend that IIBs be aware of the status of their Net Capital on a daily basis.

As a reminder, the semi-annual 1FR filing is due to NFA 17 business days after period end (June 30, 2014).  We recommend all IIBs file 1FRs prior to July 23, 2014.  There is a $1,000.00 fine per day the filing is late.

If you have any questions or need assistance with updated and reviewing your procedures, please call Mike Coglianese at 630-351-8942 or email mike@cogcpa.com.