NASD, NFA Announce Joint Launch of Web-based Proficiency Training for Security Futures Products
Washington, DC and Chicago, IL — NASD and the National Futures Association (NFA) today announced that they have launched a Web-based training program for registered securities and futures representatives who plan to sell security futures products to their customers. The program will be available on both organizations' Web sites beginning on Tuesday, September 3, and will be offered at no charge.
The Commodity Futures Modernization Act of 2000 (CFMA) lifted the ban on single stock futures and narrow-based security indices (security futures). The CFMA also required NASD and NFA to adopt proficiency requirements related to these new products. Over the past several months, both organizations have developed similar rules to meet the CFMA's requirements. These rules state that any currently registered securities or futures professionals who intend to engage in a securities futures business must complete a training program covering security futures. NASD, NFA, and other industry organizations have developed a course content outline for such training programs.
In an effort to provide a convenient and efficient method for firms to provide their employees with the necessary training, NASD and NFA, in partnership with the Institute for Financial Markets (IFM), have developed a Web-based training program. The training program consists of five modules: 1) stocks and stock options, 2) futures contracts, 3) security futures products, 4) regulatory requirements for security futures, and 5) supervision of the offer and sale of security futures. The training program will introduce securities professionals to basic futures concepts and terminology, and futures professionals to basic securities concepts and terminology. The training program devotes two modules to security futures products. The first explains these new products, and the second discusses the new regulatory framework. The last module addresses issues relevant for supervisory personnel.
Individuals registered only with NFA should access the program through NFA's Web site (www.nfa.futures.org), while those who are registered to sell securities should access the training through NASD's Web site (www.nasd.com). Once the training is completed, the individual can print off a certificate of completion that can be copied and given to the firm for its files. In addition, NASD and NFA will electronically capture information about a registrant's completion of the course. This information will be available to member firms and eventually tied into the Central Registration Depository (CRD) and into NFA's Background Affiliation Status Information Center (BASIC).
"It is not only a regulatory requirement, but also sound business practice for firms and registered representatives to have a fundamental understanding of all of the financial products they sell, including security futures. This training program will facilitate entry into this new line of business while at the same time fostering our goal of investor protection," said Mary L. Schapiro, NASD President of Regulatory Policy and Oversight and Vice Chairman.
NASD is the leading private-sector provider of financial regulatory services, dedicated to bringing integrity to the markets and confidence to investors through effective and efficient regulation and complementary compliance and technology-based services. NASD touches virtually every aspect of the securities business — from registering and educating all industry participants, to examining securities firms, enforcing both NASD rules and the federal securities laws, and administering the largest dispute resolution forum for investors and member firms. For more information please visit www.nasd.com.