National Futures Association (NFA) has adopted a rule requiring firms and individuals to pay $1,000 fines for failing to disclose disciplinary matters on registration applications or failing to update existing registration records to disclose new disciplinary matters. NFA will impose the fine regardless of whether NFA has initiated an adverse registration action.In the case of non-disclosure by an associated person (AP) or principal, the individual’s sponsor is responsible for paying the fine, but the rule does not prohibit a sponsor from seeking reimbursement from the individual. When an AP or principal is sponsored in such capacity by multiple firms, each sponsor will be assessed the fine.
NFA has also modified its policy on adverse registration actions. Under the new policy, NFA will no longer initiate adverse registration actions when the failure to disclose is the result of negligence or carelessness.
NFA’s Notice I-14-11 is available here.
