As your industry advocate, the NIBA provides many services which help your business stay in compliance with NFA regulations. "Ask the NFA," is the way you can ask questions about those regulations and compliance requirements without having to call NFA directly.
Just email us at nfacomments@theniba.com and we will get the answers for you. Please keep in mind the purpose of this contact is to keep the lines of communication between NFA and NIBA members open, not to fix any specific individual concerns.
This month's questions were selected from those submitted by NIBA members. The answers were supplied by NFA staff.
My firm was recently examined by NFA. As part of the exam document production effort, we were directed by NFA staff to submit documents via an online, file transfer tool called “NFA Files Box.” Can you provide details on the security controls for the website?
NFA utilizes a file transfer tool and directs Members in the course of an examination to transfer firm documents to a site referred to as “NFA Files Box”. This transfer mechanism and site provide examination teams and firms with several benefits, including the fast transmission of large files, the minimization of the transmission of documents sent through e-mail, and improved security. NFA has adopted a security framework specified by the National Institute of Standards and Technology (NIST) Special Publication 800-53 "Security and Privacy Controls for Federal Information Systems and Organizations" to secure its systems, including website applications.
What rights if any does an IB have during an audit to decline to provide requested documentation?
NFA Compliance Rule 2-5 requires Members to cooperate with NFA in any investigation, inquiry, audit examination or proceeding. This rule is the foundation of a self-regulatory organization and permits NFA to obtain the information it needs from its Members to carry out its regulatory responsibilities. Therefore, all Member firms have an obligation to comply with this rule and NFA views a Member’s refusal to cooperate with NFA and produce records as an extremely serious matter, which may result in a Member Responsibility Action, disciplinary action, and subsequent expulsion of the firm from membership.
Does NFA anticipate an increase in regulatory capital requirements for Forex Dealer Members?
The Swiss National Bank’s removal of the cap on the Swiss franc's exchange rate against the Euro caused significant capital issues at several Forex Dealer Members (FDM). In light of these capital issues, NFA and CFTC staff are discussing what, if any, enhancements should be made in the areas of FDM risk management, FDM capital requirements, and the enhanced requirements for public disclosures by FDMs.