Financial Requirements
SECTION 5. INTRODUCING BROKER FINANCIAL REQUIREMENTS.
[Effective dates of amendments: December 17, 1999; December 31, 2001; June 30, 2004; September 30, 2004; July 31, 2006; and December 22, 2006.]
(a) Each Member IB, except an IB operating pursuant to a guarantee agreement which meets the requirements set forth in CFTC Regulation 1.10(j), must maintain Adjusted Net Capital (as defined in CFTC Regulation 1.17) equal to or in excess of the greatest of:
(i) $45,000;
(ii) For Member IBs with less than $1,000,000 in Adjusted Net Capital, $6,000 per office operated by the IB (including the main office);
(iii) For Member IBs with less than $1,000,000 in Adjusted Net Capital, $3,000 for each AP sponsored by the IB; or
(iv) For securities brokers and dealers, the amount of net capital required by Rule 15c3-1(a) of the Securities and Exchange Commission (17 CFR 240.15c3-1(a)).
(b)
(1) Each Member IB, except an IB operating pursuant to a guarantee agreement which meets the requirements set forth in CFTC Regulation 1.10(j), must file financial reports with NFA semi-annually, including its fiscal year end, within 17 business days of the date for which the report is prepared. All financial reports must be filed on Form 1-FR-IB or, if the Member is a broker-dealer, on Form 1-FR-IB or the FOCUS Report, and all financial reports except those filed on the FOCUS Report and required to be certified by a Certified Public Accountant must be filed electronically.
(2) The Member IB shall electronically file its financial reports by accessing NFA's financial reports database in the manner provided by NFA. Each Member IB shall designate, in the manner provided by NFA, the person or persons authorized to file its financial reports.
(3) The electronic filing of the Member IB's financial report shall constitute:
(A) a representation that the person electronically filing the financial report is a person specified in CFTC Regulation 1.10 (d)(4);
(B) an attestation that the person electronically filing the financial report is duly authorized to bind the Member IB submitting the financial report and representation that, to the best of such person's knowledge, all information contained therein is true, correct and complete;
(C) an acknowledgement that it is understood that all required items and statements are integral parts of the financial report and that the submission of any amendment represents that all unamended items and statements remain true, correct and complete as previously submitted; and
(D) an acknowledgement that it is further understood that any intentional misreports or omissions of facts constitute Federal Criminal Violations (see 18 U.S.C. 1001).
(4)
(A) No Member IB may access NFA's electronic financial reports database until NFA has assigned it a unique identifying code and password;
(B) Each Member IB is responsible for maintaining the security and confidentiality of its identifying code and password and those of the persons whom it authorizes to make electronic financial report filings on its behalf. NFA's electronic financial reports database shall record and store the identifying code of each person accessing NFA's database and shall logically associate in the database such identifying code with any electronic filing made by the person using such identifying code. The person whose identifying code is used to make an electronic filing will be deemed to have made such filing;
(C) Each Member IB shall make available any person it has authorized to make or actually performing duties related to electronic filings, for testimony in court or before the Commission, NFA or any contract market or DTF regarding the authentication, integrity or accuracy of any electronic filing; and
(D) The ability to electronically access NFA's financial reports database is a privilege and not a right. NFA may disable any person's identifying code and password and terminate the person's ability to access the database at any time, without notice or a hearing, in NFA's sole discretion, if NFA believes that the person has not complied with this Financial Requirements Section 5 or any procedures that NFA establishes to implement this Financial Requirements Section 5.
(c) A Member IB that is required to file any document with or give any notice to the CFTC under CFTC Regulations 1.10 [Financial reports of futures commission merchants and introducing brokers], 1.12 [Maintenance of minimum financial requirements by futures commission merchants and introducing brokers], 1.16 [Qualifications and reports of accountants], or 1.17 [Minimum financial requirements for futures commission merchants and introducing brokers] or is required to file any financial report or statement (e.g., FOCUS Reports) with any other securities or futures self-regulatory organization of which it is a member shall also file one copy of such document with or give such notice to NFA at its Chicago office no later than the date such document or notice is due to be filed with or given to the CFTC or the self-regulatory organization.
SECTION 5. INTRODUCING BROKER FINANCIAL REQUIREMENTS.
[Effective dates of amendments: December 17, 1999; December 31, 2001; June 30, 2004; September 30, 2004; July 31, 2006; and December 22, 2006.]
(a) Each Member IB, except an IB operating pursuant to a guarantee agreement which meets the requirements set forth in CFTC Regulation 1.10(j), must maintain Adjusted Net Capital (as defined in CFTC Regulation 1.17) equal to or in excess of the greatest of:
(i) $45,000;
(ii) For Member IBs with less than $1,000,000 in Adjusted Net Capital, $6,000 per office operated by the IB (including the main office);
(iii) For Member IBs with less than $1,000,000 in Adjusted Net Capital, $3,000 for each AP sponsored by the IB; or
(iv) For securities brokers and dealers, the amount of net capital required by Rule 15c3-1(a) of the Securities and Exchange Commission (17 CFR 240.15c3-1(a)).
(b)
(1) Each Member IB, except an IB operating pursuant to a guarantee agreement which meets the requirements set forth in CFTC Regulation 1.10(j), must file financial reports with NFA semi-annually, including its fiscal year end, within 17 business days of the date for which the report is prepared. All financial reports must be filed on Form 1-FR-IB or, if the Member is a broker-dealer, on Form 1-FR-IB or the FOCUS Report, and all financial reports except those filed on the FOCUS Report and required to be certified by a Certified Public Accountant must be filed electronically.
(2) The Member IB shall electronically file its financial reports by accessing NFA's financial reports database in the manner provided by NFA. Each Member IB shall designate, in the manner provided by NFA, the person or persons authorized to file its financial reports.
(3) The electronic filing of the Member IB's financial report shall constitute:
(A) a representation that the person electronically filing the financial report is a person specified in CFTC Regulation 1.10 (d)(4);
(B) an attestation that the person electronically filing the financial report is duly authorized to bind the Member IB submitting the financial report and representation that, to the best of such person's knowledge, all information contained therein is true, correct and complete;
(C) an acknowledgement that it is understood that all required items and statements are integral parts of the financial report and that the submission of any amendment represents that all unamended items and statements remain true, correct and complete as previously submitted; and
(D) an acknowledgement that it is further understood that any intentional misreports or omissions of facts constitute Federal Criminal Violations (see 18 U.S.C. 1001).
(4)
(A) No Member IB may access NFA's electronic financial reports database until NFA has assigned it a unique identifying code and password;
(B) Each Member IB is responsible for maintaining the security and confidentiality of its identifying code and password and those of the persons whom it authorizes to make electronic financial report filings on its behalf. NFA's electronic financial reports database shall record and store the identifying code of each person accessing NFA's database and shall logically associate in the database such identifying code with any electronic filing made by the person using such identifying code. The person whose identifying code is used to make an electronic filing will be deemed to have made such filing;
(C) Each Member IB shall make available any person it has authorized to make or actually performing duties related to electronic filings, for testimony in court or before the Commission, NFA or any contract market or DTF regarding the authentication, integrity or accuracy of any electronic filing; and
(D) The ability to electronically access NFA's financial reports database is a privilege and not a right. NFA may disable any person's identifying code and password and terminate the person's ability to access the database at any time, without notice or a hearing, in NFA's sole discretion, if NFA believes that the person has not complied with this Financial Requirements Section 5 or any procedures that NFA establishes to implement this Financial Requirements Section 5.
(c) A Member IB that is required to file any document with or give any notice to the CFTC under CFTC Regulations 1.10 [Financial reports of futures commission merchants and introducing brokers], 1.12 [Maintenance of minimum financial requirements by futures commission merchants and introducing brokers], 1.16 [Qualifications and reports of accountants], or 1.17 [Minimum financial requirements for futures commission merchants and introducing brokers] or is required to file any financial report or statement (e.g., FOCUS Reports) with any other securities or futures self-regulatory organization of which it is a member shall also file one copy of such document with or give such notice to NFA at its Chicago office no later than the date such document or notice is due to be filed with or given to the CFTC or the self-regulatory organization.
