7.2.3. FCM Disclosure Document
Futures commission merchants may not enter into a customer account agreement or accept a customer’s funds unless it discloses all information relevant to the customer’s decision to entrust its funds to the FCM. Material information includes information about the firm’s business, operations, and risk profile, and that of its affiliates. The disclosure document must be made available to each customer and to the general public by posting a copy on its website. The document must provide material information regarding these specific topics:
- • The FCM’s name, address of its principal place of business, phone number, and email address
- • The name, title, business address, business background, areas of responsibility and the nature of the duties of each of the FCM’s principals
- • The significant types of business activities and product lines it engages in and the approximate percentage of its assets and capital used in each type of activity
- • The material risks of entrusting funds to the FCM, including the nature of its investments; its creditworthiness, leverage, capital, liquidity, principal liabilities, and other lines of business
- • The name of the FCM’s SRO and the location where the annual audited financial statements of the FCM is made available
- • Any current administrative, civil, or criminal complaints or actions filed against the FCM, and any enforcement complaints or actions filed against the FCM for violations of CFTC regulations during the last three years
- • Information on how a customer may file a complaint with the CFTC or with the firm’s SRO
- • The FCM’s most recent month-end total equity, regulatory capital, and net worth
- • A summary of the FCM’s current risk practices, controls, and procedures
In addition, each FCM must adop