Series 3: 7.6.1.1. Investigations Of Non-Compliance

7.6.1.1. Investigations of Non-Compliance

Whenever the compliance director believes that any NFA requirement is being violated, she must submit a written report to the NFA’s Business Conduct Committee (BCC), which will determine whether a complaint should be issued. The report must state the reason the investigation was begun, a summary of the complaint (if there was a complaint), and the relevant facts.

If after completing the investigation the compliance department concludes that no NFA requirement is being violated, the committee report must recommend whether it should authorize the compliance director to issue a warning letter.

A warning letter is issued for minor rule infractions. It asks the firm to respond by representing that it has corrected or will stop the behavior. Or it may simply note that an investigation that warrant’s the firm’s attention and due diligence has occurred.

If the investigation concludes that a more serious violation has been committed, the compliance department must recommend whether the Business Conduct Committee should procee