DMFiala Ltd. (DMF), an introducing broker registered with the Commodity Futures Trading Commission, settled an administrative complaint filed by the National Futures Association for alleged violations of NFA rules in connection with the firm’s anti-money laundering program. NFA charged that DMF failed to complete on a timely basis its NFA-required annual independent review of the adequacy of its AML program for 2013, and likewise failed to provide AML training on a timely basis, as required by NFA rules, to all its registered associated persons for 2014. According to NFA, DMF was required to complete its 2013 annual audit AML audit by May 31, 2013, but did not finish it until August 8, 2013. Likewise, claimed NFA, the firm was required to complete its AP training by March 2014, but did not do so until July 2014. DMF agreed to settle this matter by payment of a US $15,000 fine to NFA. NFA claimed that, previously, it had discussed with DMF its late 2011 annual AML audit, and that the firm was also late in completing its 2007 AML audit.
Compliance Weeds: Futures Commission Merchant and Introducing Broker members of the National Futures have been required to have an anti-money laundering program in place since April 2002. Among the elements of such program include adoption of a policy statement that clearly outlines the registrant’s policy against money laundering, and specifies the consequences of employees not following the firm’s written anti-money laundering policies procedures and controls. An FCM's and IB's procedures and controls should enable appropriate personnel to form a reasonable belief that they know the true identity of each customer; recognize suspicious customers and transactions; and require personnel to report suspicious or unusual activity to appropriate supervisory personnel, including senior management, and to the Financial Crimes Enforcement Network of the US Department of Treasury. A specified person or persons must be designated to oversee the firm’s AML program, and ongoing education and training for appropriate persons must be conducted at least once every 12 months. Written records must be maintained to evidence compliance with the training requirement. Finally, there must be independent testing of the adequacy of each FCM’s and IB’s compliance program at least once every 12 months. (Click here for a complete discussion of the NFA’s requirements related to FCMs’ and IB’s AML program.)