NFA Highlights Common Regulatory Gaps Finance & Banking

United States: NFA highlights common regulatory shortcomings

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In three separate notices, the NFA reminded (i) futures brokers, forex brokers and introducing brokers, (ii) CPOs and CTAs and (iii) swap brokers of the reporting requirements and common gaps in regulatory compliance. Common shortcomings in cybersecurity, third-party service providers, and oversight applied to all enrollment groups.

Notice I-22-02 was aimed at futures commission dealers, forex broker members and introducing brokers. Common shortcomings included inadequate self-review questionnaires, lack of communications and exchange oversight, inadequate review of third-party service providers, and failure to adopt an information security program.

Notice I-22-03 covered CPO and CTA. Among the common failures for these types of entities were those related to financial reporting.

Notice I-22-04 addressed to swap dealers, noting deficiencies in (i) daily transaction records, (ii) standards of business conduct, (iii) market practices, (iv) portfolio reconciliation and (v) communication swap data.

The NFA has also provided reminders of recent changes to the requirements applicable to each type of regulated entity.

Primary sources

  1. NFA Notice I-22-02: Educational Resources, Common Gaps, and Other Important Regulatory Information for FCM, FDM, and IB Members
  2. NFA Notice I-22-03: Educational Resources, Common Gaps, and Other Important Regulatory Information for CPO and CTA Members
  1. NFA Notice I-22-04: Educational Resources, Common Deficiencies, and Other Important Regulatory Information for SD Members

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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