As the NFA performs frequent audits of member firms, there are areas that can be ripe for deficiency findings. As a reminder, the NFA requires training in the following areas:
- Anti-Money Laundering (“AML”) upon hire and every 365 days thereafter to ALL employees that work in areas susceptible to money laundering which would include all Associated Persons (APs). Note the Commodity Trading Advisors (CTAs) and Commodity Pool Operators (CPOs) are excluded from the AML training provisions.
- Information Security training upon hire and every year thereafter but more frequently if changing circumstances warrant. The type and extent of training would be appropriate to each employees’ access to or involvement with the firm’s information systems.
- Ethics training for all APs upon hire and at a minimum every three years thereafter.
Training can be provided in house if proof can be obtained that the training provider is qualified, has completed relevant proficiency testing, and has three years of relevant industry experience. However, most firms use an outside training service such as Exchange Analytics. Records such as training certificates or signed training logs must be maintained to demonstrate that the training was provided.
Failure to adhere to the NFA’s compliance requirements, including the training provisions mentioned above, may subject the firm to disciplinary action and or fines. For more information or assistance in meeting your NFA compliance obligations, please contact Mike Coglianese at (630) 461-5841 or mike@cogcpa.com.