NFA Bylaw 1101—Doing Business with Non-Members FAQs
Yes. The procedures should include:
- Steps firm personnel will take to determine if an entity is required to be registered with the CFTC and to be an NFA Member and
- Requirement that firm personnel review BASIC to verify that the entity is registered and an NFA Member (if registration and membership are required).
- Requirement that firm personnel document the review and maintain the documentation.
Access BASIC to check the registration and membership status of that individual or entity.
Whether a lead provider is required to be registered as an IB depends on how it generates the leads. If the provider is not a registered IB and an NFA Member, the Member purchasing the lists must find out where they come from. For more information, see the Interpretive Notice 9039.
The following table shows when an individual/entity is required to be registered as an FCM, IB, CPO, or CTA based on the locations of the entity, its customers, and the exchanges on which contracts will be traded. Exemptions may, of course, apply.
|
Entity Location |
Customer Location |
Exchange Location |
Registration Required |
|
United States |
United States |
United States |
Yes |
|
United States |
United States |
Foreign Country |
Yes |
|
United States |
Foreign Country |
United States |
Yes |
|
United States |
Foreign Country |
Foreign Country |
No |
|
Foreign Country |
United States |
United States |
Yes |
|
Foreign Country |
United States |
Foreign Country |
* |
|
Foreign Country |
Foreign Country |
United States |
No** |
|
Foreign Country |
Foreign Country |
Foreign Country |
No |
*The firm must register unless it has received an exemption under CFTC Regulation 30.5 or 30.10. BASIC will tell you if the firm is exempt under one of these rules.
** For a foreign broker acting as an FCM, registration is not required only if it submits any commodity interest transactions executed on or subject to the rules of a designated contract market for clearing on an omnibus basis through a registered FCM.
It depends on the circumstances. For example, if you receive checks from several individuals for the same account, the person whose name is on the account may be acting as an unregistered FCM or CPO. Before accepting a third party check for a customer account, you should carefully review the reason for the deposit, ask why the account is receiving a third party check, and assess the relationship between the parties. If you accept the deposit, you should document both the reason for accepting it and the steps you took to investigate the situation.