“License and Registration, Please”

A how-to of becoming a market professional and accepting clients

Licence, Registration, Commodity Futures Trading Commission, CFTC, National Futures Association, NFA Please, Forex Market, fx trader, forex

“License and registration, please” is a request often made by police officers during a traffic stop. This information lets the officer know that you, as the operator of the vehicle, are qualified to operate the vehicle and that the vehicle is legal for you to drive. If only there was such a means of verification for all of these self-proclaimed “market gurus” and “holy-Grail” signal providers. Well there is, actually. Every area or country has its own regulatory body that keeps a database of all registered professionals and any related companies.

In the United States, the Commodity Futures Trading Commission (“CFTC”) and the National Futures Association (“NFA”) are responsible of regulating the futures and retail off-exchange foreign exchange markets. If you ever want to check to see if a “guru”, signal-provider, or “PAMM Manager” complies with registration and regulation requirements then simply go to www.nfa.futures.org and click “BASIC” in the top right hand corner. At the bottom of the following page, you can search by firm name or the individual’s name. Now, I’ll explain the process of getting your name listed on that database, and it should be noted that registration is required for any individual or company who wishes to advertise or approach clients for any advice, including signals and courses, concerning the futures or foreign exchange market.

First things first, you will need to pass your proficiency exams required for registration. There are two exams which the CFTC and NFA require prior to registration; the Series 3 examination and the Series 34 examination. These two exams will qualify you to work in a number of different capacities. This includes, but may not be limited to, registration as an Introducing Broker (“IB”), Associated Person (“AP”), Commodity Pool Operator (“CPO”), and/or Commodity Trading Advisor (“CTA”). Which of these you decide to register as will depend on what field you plan to work in and can be changed at any time, or you can register multiple at once. We’ll talk a little more about that in a moment, right now let’s go over the exams. Both exams are presented by the Financial Industry Regulatory Authority (“FINRA”). You can schedule a date to take the exam(s) by visiting their website at www.finra.org and submitting Form U10. Once the form is submitted, they’ll send you an invoice that must be paid within 24 hours of submitting Form U10.