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Registration and Proficiency

Registration and Proficiency. FCMs and IBs. Dual registration required Any firm already fully-registered as both a broker-dealer and an FCM or IB has no additional registration requirements. FCMs and IBs Notice Registration as a Broker-Dealer. Must be:

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Registration and Proficiency

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  1. Registration and Proficiency

  2. FCMs and IBs • Dual registration required • Any firm already fully-registered as both a broker-dealer and an FCM or IB has no additional registration requirements

  3. FCMs and IBsNotice Registration as a Broker-Dealer • Must be: • Fully-registered with the CFTC as an FCM or IB • A Member of NFA

  4. FCMs and IBsNotice Registration as a Broker-Dealer • Register using Form BD-N • Exempt from duplicative requirements of the Securities Exchange Act • Not required to be members of NASD • May not do any other securities business requiring registration

  5. Broker-DealersNotice Registration as an FCM or IB • Must be: • Fully-registered with the SEC as a broker-dealer • A member of NASD

  6. Broker-DealersNotice Registration as an FCM or IB • Register using Notice Form 7-R • Exempt from duplicative requirements of the Commodity Exchange Act • Not required to be Members of NFA • May not do any other futures business requiring registration

  7. Salespeople and supervisors only need one registration

  8. Money Managers • Dual registration is not automatically required

  9. Registered Commodity Pool Operators • SEC registration requirements depend on the amount of securities business conducted • SEC exemption for “hedge funds”

  10. Registered Investment Companies & Hedge Funds • CFTC registration requirements may apply if a fund trades even one security futures contract • No exemption for hedge funds • Other exemptions may apply

  11. Advisors • Commodity Futures Modernization Act of 2000 provides exemptions for registered CTAs and Investment Advisers

  12. Registered Commodity Trading Advisors • SEC registration not required: • Registered with the CFTC as a CTA, • Does not primarily act as an investment adviser, and • Does not give securities investment advice to a registered investment company or a business development company

  13. SEC-Registered Investment Advisers • CFTC registration not required: • Registered with the SEC as an investment adviser, • Does not primarily give personalized advice regarding or manage accounts trading regulated futures contracts, and • Does not advise funds about or make trades for funds in regulated futures contracts

  14. Case Study Registration

  15. Proficiency • Series 3 and Series 7 registrants can qualify through training if registered within six months after security futures contracts begin trading

  16. Proficiency • NFA / NASD / IFM training program • Web-based • Five modules • Any other training program that covers the required content

  17. Training must be completed BEFORE engaging in security futures activities

  18. Member must maintain records showing who took the training

  19. Proficiency • Later registrants must qualify through testing: • Series 3, or • Securities exam yet to be determined

  20. Designated Principals • All FCMs, IBs and broker-dealers must have one or more designated security futures principals (DSFP) to oversee security futures activities • Series 30 for NFA-only Members • Series 4 or 9/10 for NASD members

  21. Designated Principals: NFA (Only) Members • Current supervisors and persons qualified as branch office managers within six months: • Can qualify through training • New principals: • Must qualify by testing (Series 30)

  22. Designated Principals: NASD Members • Current options principals and those who become options principals within six months: • Can qualify through training • New principals: • Must qualify by testing (Series 4 or Series 9/10)

  23. Case Study Proficiency

  24. QUESTIONS?

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