Tardiness Will Not Be Tolerated – NFA Proposes Significant Increase In Late Report Fees
by
Andrew Saks McLeod
The National Futures Association yesterday released full details of its proposed increase in fees for filing late FDM and financial reports from $200 to $1000 per business day, representing a significant increase.
The National Futures Association (NFA) yesterday addressed a letter to Christopher J. Kirkpatrick, Deputy Secretary Office of the Secretariat at the US Commodity Futures Trading Commission, notifying the regulator’s intention to affect proposed amendments to NFA Financial Requirements Sections 10 and 13 and NFA Compliance Rule 2-48, in which an increase to fees for late financial and regulatory filings would be imposed on Forex Dealer Members (FDMs).
Underlining of Responsibility
In the letter, Senior Vice President and General Counsel to the NFA Thomas W. Sexton outlined the action which FDMs must take under existing rulings with relation to compliance with rule 2-48, in that all FDMs must file a daily electronic report with the NFA using the electronic filing method required by NFA.
The report must contain the data and be in the format prescribed by NFA. Each FDM must prepare the report as of 5:00 P.M. Eastern Time and file it with NFA by 11:59 P.M. Eastern Time the same day.
Once submitted, the FDM certifies that the report is true and complete, and late submission is subject to a fiscal penalty per late report, which until now stood at $200 per late filing.
Significant Increase In Late Fee
NFA is increasing the late fee for FDM and IB required financial filings to make the fee consistent with the fee charged to FCMs. By way of background, in 2003, NFA Financial Requirements Section 10 was adopted to impose a late filing fee on its members who file required financial reports after the due date. The current fee of $200 was established at that time.
Mr. Sexton’s letter to Mr. Kirkpatrick details that the proposed raising of the late fee was approved by the NFA’s Board of Directors on August 15, 2013, and that the fee for late filings of financial reports should be increased to $1000, and similarly, the late filing of FDM reports should also be subject to a $1000 penalty for each business day that either report is late. This represents a substantial increase over the previous tariff.
Certain previous amendments to Section 10 have taken place in recent years, one of which was to include a late fee for financial reports as well as FDM reports in 2010, which at the time was set at $200 for each business day after the due date, hence the alignment of this fee to $1000 has also been included.
Not A Sufficient Deterrent
During reviews of the existing rulings which in 2012, it was determined that a $200 per day late fee was not a sufficient deterrent for filing information beyond its due date. Therefore, Section 16 imposes a late fee of $1,000 upon FCMs for each business day that a FCM Financial Report is late rather than Section 10's $200 fee. In other words, FCMs are currently charged $1,000 per day for late financial filings, while IBs and FDMs currently pay $200 per day.
To explain the importance of how timeliness should be enforced, Mr. Sexton detailed to the CFTC in his letter that the NFA believes that the $1,000 late fee amount imposed by Financial Requirements Section 16 should be imposed on all late financial and regulatory filings.
This issue was presented to NFA's Futures Commission Merchant (FCM) and Introducing Broker (IB) Advisory Committees. The IB Advisory Committee felt that a fee of $1,000 per business day for IBs was not appropriate since they are a smaller operation than a FCM, and they do not hold customer funds.
The Committee suggested that IBs be subject to a $500 per business day late fee. The FCM Advisory Committee, however, felt that the fine amount should be the same for all late filings regardless of membership category, and late financial and regulatory filings may be indicative of other problematic issues at an NFA Member IB or FDM.
Mr. Sexton signed off by stating that the NFA intends to make the proposed amendments to Financial Requirements Sections 10 and 13 and NFA Compliance Rule 2-48 effective ten days after receipt of the letter, unless the CFTC notifies NFA that it has determined to review the proposal for approval.
The National Futures Association (NFA) yesterday addressed a letter to Christopher J. Kirkpatrick, Deputy Secretary Office of the Secretariat at the US Commodity Futures Trading Commission, notifying the regulator’s intention to affect proposed amendments to NFA Financial Requirements Sections 10 and 13 and NFA Compliance Rule 2-48, in which an increase to fees for late financial and regulatory filings would be imposed on Forex Dealer Members (FDMs).
Underlining of Responsibility
In the letter, Senior Vice President and General Counsel to the NFA Thomas W. Sexton outlined the action which FDMs must take under existing rulings with relation to compliance with rule 2-48, in that all FDMs must file a daily electronic report with the NFA using the electronic filing method required by NFA.
The report must contain the data and be in the format prescribed by NFA. Each FDM must prepare the report as of 5:00 P.M. Eastern Time and file it with NFA by 11:59 P.M. Eastern Time the same day.
Once submitted, the FDM certifies that the report is true and complete, and late submission is subject to a fiscal penalty per late report, which until now stood at $200 per late filing.
Significant Increase In Late Fee
NFA is increasing the late fee for FDM and IB required financial filings to make the fee consistent with the fee charged to FCMs. By way of background, in 2003, NFA Financial Requirements Section 10 was adopted to impose a late filing fee on its members who file required financial reports after the due date. The current fee of $200 was established at that time.
Mr. Sexton’s letter to Mr. Kirkpatrick details that the proposed raising of the late fee was approved by the NFA’s Board of Directors on August 15, 2013, and that the fee for late filings of financial reports should be increased to $1000, and similarly, the late filing of FDM reports should also be subject to a $1000 penalty for each business day that either report is late. This represents a substantial increase over the previous tariff.
Certain previous amendments to Section 10 have taken place in recent years, one of which was to include a late fee for financial reports as well as FDM reports in 2010, which at the time was set at $200 for each business day after the due date, hence the alignment of this fee to $1000 has also been included.
Not A Sufficient Deterrent
During reviews of the existing rulings which in 2012, it was determined that a $200 per day late fee was not a sufficient deterrent for filing information beyond its due date. Therefore, Section 16 imposes a late fee of $1,000 upon FCMs for each business day that a FCM Financial Report is late rather than Section 10's $200 fee. In other words, FCMs are currently charged $1,000 per day for late financial filings, while IBs and FDMs currently pay $200 per day.
To explain the importance of how timeliness should be enforced, Mr. Sexton detailed to the CFTC in his letter that the NFA believes that the $1,000 late fee amount imposed by Financial Requirements Section 16 should be imposed on all late financial and regulatory filings.
This issue was presented to NFA's Futures Commission Merchant (FCM) and Introducing Broker (IB) Advisory Committees. The IB Advisory Committee felt that a fee of $1,000 per business day for IBs was not appropriate since they are a smaller operation than a FCM, and they do not hold customer funds.
The Committee suggested that IBs be subject to a $500 per business day late fee. The FCM Advisory Committee, however, felt that the fine amount should be the same for all late filings regardless of membership category, and late financial and regulatory filings may be indicative of other problematic issues at an NFA Member IB or FDM.
Mr. Sexton signed off by stating that the NFA intends to make the proposed amendments to Financial Requirements Sections 10 and 13 and NFA Compliance Rule 2-48 effective ten days after receipt of the letter, unless the CFTC notifies NFA that it has determined to review the proposal for approval.
Devexperts Checks Off Type 2 SOC 2 Audit for Enhanced Data Security
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
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#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
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20-22 MAY 2024
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#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
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Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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