NFA Highlights Common Regulatory Deficiencies

In three separate notices, NFA reminded (i) futures commission merchants, forex dealers, and introducing brokers, (ii) CPOs and CTAs, and (iii) swap dealers on reporting requirements, and common deficiencies in regulatory compliance. Common deficiencies in cybersecurity, third-party service providers and supervision were applicable to all registration groups.

Notice I-22-02 addressed futures commission merchants, forex dealer members and introducing brokers. Common deficiencies included inadequate self-examination questionnaires, failure to supervise communications and trading, inadequate review of third-party service providers and failure to adopt an information security program.

Notice I-22-03 covered CPOs and CTAs. Among the common failures for these types of entities were those relating to financial reporting.

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

NFA also provided reminders of recent amendments to the requirements applicable to each type of regulated entity.

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