NFA reminded members to implement no less than the minimum requirements outlined in the recently updated NFA Interpretive Notice Compliance Rule 2-9 ("Supervision of Branch Offices and Guaranteed IBs"). The updated Interpretive Notice becomes effective on January 1, 2020.
As previously covered, the updates take into account developments in electronic trading, electronic communications and other technologies. The new interpretations give members more flexibility with respect to annual on-site inspections of futures commission merchants, CTA and CPO branch offices and guaranteed introducing brokers ("IBs").
The substantive changes require NFA members to, among other things:
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ensure that there are personnel at branch offices or guaranteed IBs who follow developments related to the CEA, and CFTC and NFA rules;
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promptly perform branch office or guaranteed IB on-site inspections once members are aware of any irregularities;
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implement procedures designed to ensure that branch offices and guaranteed IBs' personnel receive adequate training to follow industry rules, properly handle customer accounts and satisfy ethics training requirements; and
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provide notification by associated persons to members of any events that may require disclosure on Form 8-R.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
