If my FCM becomes the guarantor of an IB that is currently listed on NFAs five-year disciplined firms list, will I need to count the APs registered at the IB as if they were registered at my FCM?
Yes. Under the Interpretive Notice to Compliance Rule 2-9: Enhanced Supervisory Requirements, the APs of an FCM’s GIBs will be treated as APs of the FCM for determining whether the FCM meets the criteria to adopt the enhanced supervisory requirements. The sole exception to this rule would occur if the GIB were added to the five-year disciplined firms list after the effective date of its guarantee agreement with the FCM. In that case, the APs of the GIB would not be counted toward the FCMs total number of APs with at least one disciplined firm in their background as long as they have not been registered at any other firms on NFA’s disciplined firms list. Note that if an FCM enters into a guarantee agreement with an IB that has been charged in an NFA or CFTC enforcement action alleging sales practice or promotional material violations and the charges have not been resolved, the APs of the GIB would count toward the FCMs total number of APs with at least one disciplined firm in their back
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