About Us

Futures Compliance, operated by consultants with over 15 years of experience as compliance officers and industry executives, is a regulatory compliance consulting firm that is in the business of providing compliance advice to brokers, advisors and managers that are in the exchange traded commodity futures industry. Read more

Registration

With our deep understanding of CFTC and NFA laws, we can assist your organization in the CFTC and NFA registration process. In doing so, we handle the entire registration process and acts as liaison between you and regulators to ensure that your introducing broker (IB), commodity trading advisor (CTA) registrations are properly and safely obtained. Read more

Compliance

We provide a full range of regulatory compliance outsourcing services including, preparation of compliance policies and procedures manuals and disclosure documents, conducting compliance audits and NFA Self-Exam Checklists, review of existing compliance controls, promotional material reviews, setting record keep requirements and more. Read more

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Overview

With respect to commodity futures transactions, the US commodity futures laws were designed and implemented by the CFTC and NFA to protect US customers and govern brokers and managers that operate out of of maintain offices in the US. Futures Compliance specializes in providing regulatory compliance guidance and advice for both on and off-shore organizations that offer exchange traded commodity futures products to US clients and/or operate on-shore and offer such products to US and/or Non-US clients. In short, we help our clients circumnavigate the ever changing and complex regulatory landscape.

From start-up to tenure organizations, we work with various clients in many different stages of their business lifecycle to provide commodity futures registration, compliance and consulting services. Our target clients include domestic and foreign organizations transacting in commodities as well as small and large introducing brokers, asset managers, investment advisors, hedge fund managers and trading systems providers who engage in such transactions on behalf of their customers.

How we can help

Through our commodity futures registration and compliance services, we can greatly shorten the timeframe in which brokers and managers your organization canyourtheir regulatory compliance needs and focus on your core competencies. We provide services in the following areas for Introducing Brokers (IBs), Commodity Trading Advisors (CTAs), and Commodity Pool Operators (CPOs):

  • Futures Registration
  • Compliance Document Preparation
  • Compliance Outsourcing and Consulting

Our consultants are in regular and frequent contact with industry regulators so our clients are always up to date on the latest regulatory rules and regulations. Our staff is comprised of industry experts in commodities regulation, including accountants, industry executives and compliance officers and also outsources industry attorneys for certain clients.

We provide services to our clients on an hourly or project basis or via a upfront retainer. Please contact us us for more information on pricing.

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Futures Registration

Futures Compliance can provide CFTC and NFA registration services for those organizations wishing to act as introducing brokers or managers of exchange traded commodity futures transactions. We can provide full service registration assistance in the following registration categories:

• Introducing Broker (IB)
• Commodity Trading Advisor (CTA)
• Commodity Pool Operator (CPO)

Please note that depending on the complexity of your organization, the registration process with the CFTC and NFA can take from to 3 to 6 months to complete. It is also important to point out that you seek out the proper registration category (i.e. do not select CTA or CPO because you don't want to put up the net capital requirements) as selecting the improper category to avoid additonal regulatory or financial responsibility can result in penalties and fines from the CFTC and NFA.

Generally, with regards to exchange trade commodity futures transactions, those individuals or organizations: (a) introducing customer accounts and collecting transaction-based commissions would need to seek the IB registration category, (b) managing customer accounts on a discretionary (managed account) basis and collecting advisory fees would need to seek the CTA registration category, and (c) operating a commodity futures hedge fund or fund of hedge funds (FoF) and collecting advisory fees would need seek the CPO registration category. See each registration category below for a breif description.

Commodity Futures Introducing Broker Registration (IB)

Futures IBs are generally organizations that solicit orders or accounts exchange trade commodity futures transactions (i.e. collect brokerage commissions) and introduce such accounts or solicit such orders to Futures Commission Merchant (FCM).

Futures Commodity Trading Advisor Registration (CTA)

Futures CTAs are generally organizations that manage customer accounts on a discretionary (managed account) basis, collect advisory based fees and the funds of each customer is treated as a separate account and is not pooled with other investors as in a hedge fund or investment pool. Please note that advisors of managed futures accounts who utilize PAMM structures to trade multiple client accounts may also need to register as an investment advisor depending on the State in which the client resides and/or manager operats out of as some States may view the PAMM structure as a pooled investment vehicle, thereby a security.

Futures Commodity Pool Operator (Futures Hedge Fund) Registration (CPO)

Futures CPOs are organizations that provide investment advice to commodity futures investment pools, partnerships or futures hedge funds. Futures commodity pools are typically structured as limited partnerships in which investor funds are solicited to invest in the commodity pool. If you operate a partnership that solicits outside funds to invest in the partnership, then you will most likely need to register as a CPO. Please note that operators of pools may need to register as an investment advisor depending on the State in which the investor resides and/or pool is operated as some States may view the pool’s offering document as a security.

Exam Requirements

Those seeking CFTC registration and NFA membership are, at a minimum, required to take the Series 3 Exam. However, those individuals that have already obtained their Series 3 and have not lapsed there license in the past two years are exempt from taking the Series 3. Organizations operating branch offices will be required to have at least one individual per branch with a Series 30 Exam.

Registration Fees

Below are the fees associated with each respective category of registration. Please note that our fees are in addition to the figures below:

• NFA Membership Fee: $750
• Principle and Associated Person (AP) Fee: $85 per person
• Firm Application (For Each Registration Category): $200

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Futures Compliance Document Preparation

Futures Compliance can prepare and draft the required internal and customer related compliance documents for introducing brokers (IB), commodity trading advisors (CTA) and commodity pool operators (CPO). Since each organization is unique in size, structure and business model, preparation of such compliance documents requires varying degress of customization to maintain CFTC and NFA compliance.

Our consultants will work closely with you to learn and understand your business model and develop a tailor made compliance documents that fit your organization’s needs. Our compliance document preparation services are billed on an hourly or project basis via an upfront retainer. We provide the following types of compliance document preparation:

  • Compliance Policies and Procedures Manuals/Written Supervisory Procedures (WSPs) for Introducing Brokers (IBs), Commodity Trading Advisors (CTAs) and Commodity Pool Operators (CPOs)
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  • Customer Account Opening Documents and Additional Risk Disclosures for Introducing Brokers (IBs)
  • Disclosure Documents (D-Docs) for Commodity Trading Advisors (CTAs)
  • Private Placement Memorandum (PPM) for Commodity Pool Operators (CPOs) (Reviews)

Compliance Manual Preparation

We provide highly customized compliance manuals (WSPs) that outlines, in detail, all of the pertinent compliance related functions of your organization, including but not limited, anti-money laundering procedures, disaster recovery and business continuity procedures, ethics and compliance training, annual review and attestations, self-exam checklists, main and branch offices audits, promotional material, websites, social networking and advertising reviews, sales monitoring, communications monitoring, customer complaint procedures, books and records, cash management, account opening procedures and more.

Account Opening Document Preparation

When introducing brokers (IBs) introduce customer accounts to FCMs and clearing brokers many times, they only submit their FCMs or clearing brokers documentation to the client for completion. We believe that such documentation is inadequate in protecting the IBs relationship with the customer and clearing broker. We provide supplemental customer account opening documentation to further protect the IB.

Disclosure Document Preparation

We prepare Disclosure Documents for CTAs that address of the compliance requirements of the CFTC and NFA such as, listing the principal risk factors of the CTA’s managed futures programs, conflicts of interest, advisory fees, background of the CTA, litigation and the CTA’s performance history and more.

Private Placement Memorandum Preparation

We can review and modify various aspects of your fund's private placement memorandum (PPM), including your investment strategy, risk factors, conflicts of interest, principal backgrounds, litigation history, performance figure, advisory fees and expenses. Preparation of PPM, Subscription and LP Agreements must be done in conjunction with outside counsel.

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Futures Compliance Outsourcing

Our consulting process involves a deep understanding of our client’s needs and goals. We believe that what distinguishes us in the marketplace, is our consultative approach and desire to listen to clients first and understand their business models, needs and goals.

With that in mind, we believe our most value add service is compliance outsourcing as our futures registration and compliance document preparation services are only initial programs meant to get the IB, CTA or CPO started. Once you are operational, the most important tasks and challenges lie ahead, ongoing compliance. With our compliance outsourcing services, you can utilize Futures Compliance as a full-service compliance solution or as a "à la-carte" type service.

Our compliance outsourcing services in include:

• Answering day-to-day compliance questions
• Modifying existing supervisory and compliance procedures to meet regulatory changes
• Assisting with documenting the customer complaint process
• Preparing you for a NFA audits
• Helping you conduct your Annual Compliance Meetings and Ethic Training
• Helping you respond to CFTC and NFA inquiries
• Reviewing websites, advertising and marketing material
• Implementing communications monitoring controls and email archiving systems
• Reviewing 1FR-IB FOCUS reports (IBs only)
• Performing Online Registration System (ORS) updates
• Providing consultations on any other compliance issues specific to your organization's futures regulation needs

In addition to outsourcing your ongoing futures compliance needs, our consultants can also made recommendations to industry partners, such attorneys, accountants, software providers and clearing firms.

Please contact us us to find out more about how we can your compliance needs.

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News

Subject: CFTC Releases Final Rules Regarding Retail Forex Transactions
Release Date: August 30, 2010

Washington, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) today announced the publication in the Federal Register of final regulations concerning off-exchange retail foreign currency transactions. The rules implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Food, Conservation, and Energy Act of 2008, which, together, provide the CFTC with broad authority to register and regulate entities wishing to serve as counterparties to, or to intermediate, retail foreign exchange (forex) transactions.

“These rules of the road will help protect the American public in the largest area of retail fraud that the CFTC oversees: retail foreign exchange,” CFTC Chairman Gary Gensler said. “All CFTC registrants involved in soliciting and selling retail forex contracts to consumers will now have to comply with rules to protect the investing public. This is also the first final rule that the Commission has published to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act. We look forward to publishing additional rules to protect the American public.”

The final forex rules put in place requirements for, among other things, registration, disclosure, recordkeeping, financial reporting, minimum capital and other business conduct and operational standards. Specifically, the regulations require the registration of counterparties offering retail foreign currency contracts as either futures commission merchants (FCMs) or retail foreign exchange dealers (RFEDs), a new category of registrant. Persons who solicit orders, exercise discretionary trading authority or operate pools with respect to retail forex also will be required to register, either as introducing brokers, commodity trading advisors, commodity pool operators (as appropriate) or as associated persons of such entities. “Otherwise regulated” entities, such as United States financial institutions and SEC-registered brokers or dealers, remain able to serve as counterparties in such transactions under the oversight of their primary regulators.

The final rules include financial requirements designed to ensure the financial integrity of firms engaging in retail forex transactions and robust customer protections. For example, FCMs and RFEDs are required to maintain net capital of $20 million plus 5 percent of the amount, if any, by which liabilities to retail forex customers exceed $10 million. Leverage in retail forex customer accounts will be subject to a security deposit requirement to be set by the National Futures Association within limits provided by the Commission. All retail forex counterparties and intermediaries will be required to distribute forex-specific risk disclosure statements to customers and comply with comprehensive recordkeeping and reporting requirements.

The final rules become effective October 18, 2010.

For questions and answers regarding final retail foreign exchange rule, download: Final Forex Rules

Last Updated: August 30, 2010

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Contact Us

Futures Compliance
700 Lavaca, Suite 1400
Austin, TX 78701
Tel: +1 512-692-6145
Fax: +1 512 697 0046

Sales

Contact a Futures Compliance representative to learn more about our regulatory compliance services. sales@derivativescompliance.com

General Information

Contact us to get general information or to provide us with feedback so that we can better serve our clients. info@derivativescompliance.com

Recruiting

Contact our human resources department and learn more about job openings at Futures Compliance. jobs@derivativescompliance.com

IMPORTANT NOTICE REGARDING OCTOBER 18, 2010 RETAIL FOREX DEADLINE: Please note there may be significant delays in processing your application due to an influx of applications for forex registrations. Once your application has been submitted to the NFA, the registration process can take anywhere from 3 to 6 months and can take longer if you are not prepared. Contact us as soon as possible so that we can ensure that your firm does not experience any unnecessary delays.

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Please complete the form below to request more information on our futures compliance services and how CFTC regulations may affect you and your organization. After submitting the information, one of our representatives will contact you. If your email account has any type of spam filter, please update your account to accept all emails from the derivativescompliance.org domain. An asterisk denotes a required field.

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