It's especially important for FCMs to remember that any FCM which enters into a guarantee agreement is, according to Compliance Rule 2-23, jointly and severally subject to discipline for acts and omissions by the IB which violate NFA rules.

Guaranteed IBs, on the other hand, need to be aware that if their guaranteeing FCM's minimum required adjusted net capital happens to fall below the prescribed early warning level for a specified period of time, the FCM may be forced to terminate their guarantee agreements.

Either party to a guarantee agreement can initiate a termination process by providing written notice of intent to the party, NFA, the CFTC and the FCM's DSRO, at least 30 days prior to the planned termination date. On the termination date, the IB has to cease doing business until it files either a new guarantee agreement or the required financial reports with NFA.