NFA Enhanced Supervision Requirements

APs must receive training on NFA, CFTC, and internal requirements before interacting with customers or counterparties, at least annually, and supplemental training when there are material changes to requirements or identified misconduct.

The requirements apply to Futures Commission Merchants (FCMs), Commodity Trading Advisors (CTAs), Commodity Pool Operators (CPOs), Introducing Brokers (IBs), Swap Dealers (SDs), and Forex Dealer Members (FDMs).

• Initial training on applicable NFA, CFTC and internal requirements before APs interact with customers or counterparties
• Annual training thereafter, also covering applicable requirements
• Supplemental training following material changes to requirements
• Additional training if an AP is found not following requirements
• Training for APs from Disciplined Firms covering enforcement action subject areas

Exchange Analytics offers courses such as Futures Ethics, Swaps Ethics, Derivatives Market Conduct, and Noncompetitive Trading, which cover NFA, CFTC, and Exchange requirements comprehensively.

The standards include:

• Written supervisory programs detailing procedures to detect and resolve non-compliance.
• Training
• Qualified supervisory personnel.
• Due diligence for AP qualification.
• Pre-trade communications compliance.
• Order handling and trading activity supervision.

Firms must capture and retain required communications using approved equipment and applications, review communications for compliance, and document the review and investigation process.

Yes! There are a number of ways that Exchange Analytics can help train your APs on your internal requirements.

• The easiest is to embed links to your policies and procedures in our training content accompanied by an acknowledgment statement the AP must affirm (by selecting an acknowledgment button that we insert into the course); users are unable to proceed through and complete the course until the select the acknowledgment button
• Insert PDFs of your P&P directly into our course content – users must open the documents in order to complete the course
  • alternatively, we can also force them to open each page for even greater assurance that they have reviewed content
• Integrate your requirements directly into the text of our course content such that when a given topic is covered, such as client confidentiality, all applicable requirements are covered at once: NFA, CFTC, Exchanges, and your internal requirements

Of course, you are always free to train APs on your own. But you will need to be sure you are able to track their progress and can retain evidence that they reviewed the content!

When it comes to meeting the new annual training expectations under Interpretive Notice 9083, you don’t need to reinvent the wheel.

With over 30 years of experience helping firms meet NFA training obligations, our courses are specifically designed to hit the mark – covering AP responsibilities, supervision standards, and firm-specific procedures. Our content is updated regularly to include the latest changes to requirements, and the look and feel are also refreshed, so that you are covered year after year.

When it comes to recordkeeping, our platform delivers what regulators want to see – real-time tracking, certificates of completion, system logs, and detailed training records.

In short, Exchange Analytics provides courses that meet the new training requirements, options for incorporating internal requirements, and assistance with policies and procedures.

Supervisors must be appropriately qualified to carry out their supervisory functions. This includes ensuring they have the necessary knowledge and skills to oversee APs’ activities and compliance with NFA, CFTC, and internal requirements.

Supervisors are responsible for:

• Ensuring APs receive initial training before interacting with customers or counterparties.
• Overseeing the annual training of APs on applicable requirements.
• Providing supplemental training when there are material changes to requirements or identified misconduct.
• Ensuring APs from Disciplined Firms receive training covering enforcement action subject areas.
• Implementing and monitoring the firm’s written supervisory program to detect and resolve non-compliance.

Yes, both CME and ICE Futures U.S. have supervisory requirements that are similar to those of the NFA. The Exchange and the NFA are all self-regulatory organizations regulated by the CFTC, establishing and enforcing their own rules to maintain orderly market conduct.

One of the significant advantages of Exchange Analytics’ course content is that we integrate CFTC, NFA and Exchange requirements together so topics are covered seamlessly and efficiently across all the regulation sets.

CME Group’s supervisory requirements include:

• Implementing reasonable measures to prevent rule violations through thorough training and robust internal controls
• Detecting violative behavior through diligent monitoring and surveillance
• Correcting noncompliance quickly, which may involve disciplinary actions, enhanced training, or significant changes to trading strategies
• Supervising employees and agents, including Automated Trading Systems (ATS), to ensure compliance with CME rules

ICE Futures U.S. requires firms to:

• Establish, administer, and enforce supervisory systems, policies, and procedures based on the nature and size of their Exchange-related activities
• Ensure compliance with Exchange rules through effective monitoring and regulation of all trading activity
• Maintain the confidence of participants and the integrity of markets by working proactively with regulators and policy makers

Similar to NFA’s guidelines, both CME and ICE Futures U.S. emphasize the importance of diligent supervision, comprehensive training, and robust internal controls to prevent, detect, and correct noncompliance. They also require firms to have written supervisory programs and qualified supervisory personnel to oversee trading activities and communications.