S3 2.3

Question 1

What type of org is the NFA, and when was it established?

Answer 1

SRO, 1982

Question 2

Whose rules does the NFA enforce?

Answer 2

CTFC regulations and NFA rules

Question 3

Some NFA rules

Answer 3

1) members need be 21+ yrs of age
2) Can compel testimony, subpoena docs and require statements under oath w/o court or approval
3) Respondent has 30 days to respond, else will be accepting accusations
4) Respondents have right to a hearing

Question 4

Who can a respondent appeal a decision with?

Answer 4

Appeals Committee

Question 5

Can a respondent appeal the Appeals Committee decision?

Answer 5

Nope

Question 6

Can a case be settled w/o admitting guilt?

Answer 6

Yes

Question 7

Is it OK for member to withdraw while under investigation?

Answer 7

Nope

Question 8

Is NFA arbitration always required?

Answer 8

Unless parties themselves settle and enter binding agreement

Question 9

What is the latest a violation case may be filed?

Answer 9

No more than 2 years

Question 10

Number of arbitrators assigned by NFA

Answer 10

1) claim 50k < amount < 100k - up to 3 arbitrators

2) amount > 100k always 3 arbitrators

Question 11

What if member found guilty, but fails to pay arbitration awards?

Answer 11

Member gets barred from futures business till pays in full

Question 12

Are both claims made to the NFA and NFA decisions made public?

Answer 12

Decisions, yes / Claims, no

Question 13

Which are some disciplinary actions taken by the NFA?

Answer 13

1) Cease and desist
2) up to 250k fine / violation
3) warning letter for minor infractions

Question 14

Is it OK for firms to have supervisory procedures just verbally?

Answer 14

Procedures MUST be in written

Question 15

Will firms be asked to stop trading while under investigation?

Answer 15

NO

Question 16

How often must FCMs audit their branch offices and how long must the reports on these audits be kept?

Answer 16

Audi to be performed annually; reports kept for 5 years, 2 readily accesible

Question 17

What is MRA?

Answer 17

Member Responsibility Action = When immediate action is required

Question 18

Does promotional material need to be checked?

Answer 18

Yes, and approved in writing by Supervisory Employee

Question 19

How long do we need to keep promo material?

Answer 19

5 years

Question 20

What if promo material prepared by a 3rd party?

Answer 20

Equally responsible

Question 21

Hypothetical result history and Disclaimer publication

Answer 21

History > 12 months -> after results

History < 12 months -> Before results

Question 22

Does a firm need NFA approval for making public trading recommendations?

Answer 22

Yes, 10 days prior

Question 23

Are newsletters, monthly / monthly considered promo materials?

Answer 23

Yes