Sep 30, 2025 You’ve just been contacted by National Futures Association (“NFA”) and find out that they are going to conduct an examination. Receiving an audit notice can be a stressful experience, but understanding the current regulatory climate can help firms prepare and navigate the process with confidence. In 2025, NFA audits are characterized by a continued emphasis on robust internal controls, detailed trade reconstruction, robust supervisory systems, heightened scrutiny of financial records and cybersecurity practices. Turnkey Trading Partners was originally founded to help Commodity Futures Trading Commission (“CFTC”) registered, NFA member firms navigate audits. The company’s founder, James Bibbings, was a supervising auditor for NFA prior to starting the firm. After conducting numerous onsite exams for NFA he realized that many industry participants did not willfully break compliance rules and regulations. Rather, they didn’t understand regulator expectations and generally did not have the acumen to put in place the proper compliance programs to stay compliant. Bibbings experience working for NFA allowed Turnkey to become a leader in providing routine audit support. Turnkey has only gotten stronger in this area since we were founded in 2008. Every year Turnkey works with dozens of customers to support routine NFA examinations. Turnkey’s team regularly communicates with NFA staff members. In fact, Turnkey and NFA examiners often know each other by name and have a mutual working respect for one another. Key Themes in 2025 NFA Audits: Turnkey’s close engagement with NFA audit staff allows us to identify areas of focus more quickly than other firms. In some instances, Turnkey even makes suggestions to NFA auditors about how to improve upon audit best practices. During 2025 the following areas have been critical to be aware of during NFA exams. All firms facing a regulatory examination should be familiar with the following. Intensified Focus on Internal Controls and Trade Reconstruction: Stemming from past industry failures, NFA maintains a sharp focus on firms’ internal controls. Examiners expect not just written policies and procedures, but also demonstrable evidence that firms are consistently following them. A central theme is the ability to “recreate the trade,” requiring firms to produce a clear, step-by-step narrative of any transaction, from order entry to final settlement, supported by a complete communication trail. NFA also will expect communication supervision to be first rate. They will test communication capture and record retention systems during nearly every exam. Heightened Expectations for Communication Records: Regulators are cracking down on “off-channel communications,” with the SEC and CFTC levying over $2 billion in fines since 2022 for the use of personal devices and unapproved messaging apps. NFA has followed suit, with a near zero-tolerance approach to personal devices. Voice brokerages, in particular, are under pressure to capture and retain all communications, whether on platforms like ICE Chat, Cloud9, or other mediums used for over-the-counter (OTC) transactions. Scrutiny of Financials and Accounting Practices: Firms can expect more robust and specific examinations of their financial records. This includes a close look at performance data, with an emphasis on accurate calculations. Hypothetical performance remains highly scrutinized and will almost certainly prolong an audit, as NFA will require a detailed walkthrough of how every figure was generated and substantiated. There’s also a noted issue with firms using cash accounting instead of the required GAAP accrual bookkeeping. NFA firms are now expected to provide bank statements for nearly every month throughout an examination, and these must align with their accrual bookkeeping records. Ongoing Education and Training: Cybersecurity remains a high-priority area. NFA is actively testing firms’ cybersecurity protocols, making it crucial for firms to have a well-documented Information Systems Security Program (ISSP) and annual testing. A common deficiency is the failure to provide cybersecurity training to employees upon hiring and annually thereafter. Similarly, many firms don’t realize that there are industry training obligations they must adhere to outside NFA’s jurisdiction. For example, NFA auditors typically do not evaluate Market Regulation and Best Practice training. Leading industry exchanges however require all market participants to be knowledgeable about exchange rules. How does your firm square this gap? NFA and other industry regulators increasingly expect a robust and well-rounded education and training program that goes beyond “checking boxes”. Another area of concern is that firms mistakenly believe training is only required for associated persons and principals. This too is not accurate. Training is required for those to whom it should be reasonably provided given their responsibilities within the registrant. Turnkey considers the following to be required training modules for most industry registrants. This would include Cybersecurity, AML, Ethics, Market Regulation, Electronic Communications and Supervision, as well as Identity Theft. As a best practice each of these trainings should be completed at the time of hire and then each year annually thereafter. For Futures Commission Merchants (FCMs) customer protection is also required. All of these courses are offered by Turnkey Training. Supervision and Vendor Oversight: NFA Rule 2-9 regarding supervision continues to be a priority. Firms must not only have supervisory procedures in place but also be able to demonstrate how they scope their reviews. Simply stating that emails are sampled is no longer sufficient; NFA wants documented reasoning for the scope and frequency of such reviews. Additionally, there is a growing focus on the oversight of third-party service providers (TPSPs). Firms are expected to conduct and document annual vendor reviews, including risk assessments and due diligence on vendor arrangements. Common Deficiencies: Several recurring issues are being flagged in 2025 NFA examinations: Bylaw 1101 Violations: This includes failures in the onboarding process, such as not checking NFA’s BASIC system, failing to confirm AP registration, or overlooking third-party controllers. Recordkeeping Gaps: Firms must adhere to CFTC Regulation 1.31 and NFA Rule 2-10, which mandate tamper-proof retention of records through methods like encryption and version control. Failures in Attestation: Annual attestations for various programs like AML and cybersecurity must be signed and acknowledged by staff. Questionnaire Confusion: A common point of confusion is the distinction between the Annual Member Questionnaire and the Self-Examination Questionnaire; both are required annually or upon changes to firm operations. Recommendations for a Smoother Audit Experience: Contact a leading consulting firm: Call Turnkey for help. NFA examinations can take six months or more to complete. They are long and can be complicated. If you are not familiar with the process it will be very stressful. Support is more affordable than you might think. Consider retaining a compliance consultant to be a form of insurance to ensure you don’t make mistakes along the way. Most would not undergo a tax audit without professional help, NFA audits are no different. Get Organized: Upon receiving an audit letter, centralize all requested items to ensure timely responses. Missing deadlines can be costly. Document Everything: Oral explanations are insufficient. Maintain thorough logs, sign-offs, and attestations to provide a clear evidence trail. Conduct Mock Audits: Proactively test your ability to reconstruct trades and pull communication records. This will help identify and rectify any gaps before NFA does. Keep Policies Updated: Regularly review and update your ISSP, TPSP oversight procedures, and supervision policies to reflect current risks and business practices. Prioritize Training: Ensure all employees complete required training modules at the time of hire and annually, and maintain dated records of completion. The NFA examination landscape in 2025 is more data-driven and less forgiving than ever before. However, firms that are proactive in their preparation, meticulous in their documentation, and consistent in their compliance efforts can navigate the process successfully. Ready to prepare before NFA comes knocking? Contact Turnkey Trading Partners today.