S3 2.3 Flashcards
What type of org is the NFA, and when was it established?
SRO, 1982
Whose rules does the NFA enforce?
CTFC regulations and NFA rules
Some NFA rules
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
Who can a respondent appeal a decision with?
Appeals Committee
Can a respondent appeal the Appeals Committee decision?
Nope
Can a case be settled w/o admitting guilt?
Yes
Is it OK for member to withdraw while under investigation?
Nope
Is NFA arbitration always required?
Unless parties themselves settle and enter binding agreement
What is the latest a violation case may be filed?
No more than 2 years
Number of arbitrators assigned by NFA
1) claim 50k < amount < 100k - up to 3 arbitrators
2) amount > 100k always 3 arbitrators
What if member found guilty, but fails to pay arbitration awards?
Member gets barred from futures business till pays in full
Are both claims made to the NFA and NFA decisions made public?
Decisions, yes / Claims, no
Which are some disciplinary actions taken by the NFA?
1) Cease and desist
2) up to 250k fine / violation
3) warning letter for minor infractions
Is it OK for firms to have supervisory procedures just verbally?
Procedures MUST be in written
Will firms be asked to stop trading while under investigation?
NO
How often must FCMs audit their branch offices and how long must the reports on these audits be kept?
Audi to be performed annually; reports kept for 5 years, 2 readily accesible
What is MRA?
Member Responsibility Action = When immediate action is required
Does promotional material need to be checked?
Yes, and approved in writing by Supervisory Employee
How long do we need to keep promo material?
5 years
What if promo material prepared by a 3rd party?
Equally responsible
Hypothetical result history and Disclaimer publication
History > 12 months -> after results
History < 12 months -> Before results
Does a firm need NFA approval for making public trading recommendations?
Yes, 10 days prior
Are newsletters, monthly / monthly considered promo materials?
Yes
