The National Futures Association (NFA), a self-regulatory organization for the US derivatives industry, today warned registered FCMs and IBs that their non-compliance with its AML requirements could lead to disciplinary actions and, in some cases, hefty fines.
The Chicago-based regulator requires all FCMs and IB members to maintain an AML program that includes an annual review to be conducted by its personnel or by an independent third party.
Stricter regulations were introduced recently which now require each futures commission merchant (FCM) and introducing broker (IB) to develop and implement a written anti-money laundering (AML) program.
Additionally, reporting entities have been forced to ramp up compliance measures after being subject to the Bank Secrecy Act, which introduced new criminal offenses of failing to prevent suspected money laundering. They also must tailor their AML programs to fit their business models and allocate adequate resources to their compliance efforts.
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According to the NFA, AML procedures must address a number of areas. The elements of such a program include the appointment of a designated compliance officer to oversee the firm’s AML program. Furthermore, the company should conduct ongoing education and training for mandated persons on “the firm’s AML policies and procedures, the relevant federal laws, and NFA guidance” at least once every 12 months.
Finally, there must be independent testing of the adequacy of each FCM’s and IB’s compliance program at least once every 12 months.
“Additionally, FCMs and IBs must document these testing results, report results to the firm’s senior management or internal audit committee or department, and ensure that any deficiencies noted are addressed and corrected,” the NFA said.
The National Futures Association self-regulates futures trading and is itself supervised by the US Commodity Futures Trading Commission (CFTC).