Rules & Regulations Relating to the Conduct of the Business and Affairs

Section 1. Definitions:

1. "Approved Professional Designation" shall include without limitation, CA, CFE, CGA, CGFM, CIA, CMA or CPA;

2. "By-Laws" shall mean the by-laws of the Association;

3. "CFS Certificate" shall mean the written certificate issued by the National Executive Committee on recommendation of the Professional Standards and Admissions Committee certifying that the member is a designated Certified Fraud Specialist; 4. "Designated Member" shall also mean Fellow Members and Regular Member as that term is defined in the By-Laws;

5. "Member" shall mean, whether in the singular or the plural, Fellow Member(s), Regular Member(s), Associate Member(s) and honorary Member(s), unless the context dictates otherwise;

6. "Points" shall mean points accumulated by the candidate according to the criteria listed herein and as established by the Board of Regents from time to time and relating to the applicant's character, experience and knowledge of fraud prevention, detection and investigation;

7. "Related Work Experience" shall mean one year of experience and includes employment in any of the following areas, including without limitation, law enforcement, investigations, internal and external auditing, loss prevention, forensic and investigative accounting, law and criminology;

8. "Year of experience" shall mean the totaling or aggregate of no less than one thousand (1000) hours per annum to constitute a qualifying year of Related Work Experience;

9. "Related Post Secondary Education" shall mean enrollment in an accredited college or university in a course of study related to the investigation, detection or prevention of fraud, including without limitation, accounting, auditing, business, criminology, investigations and law.

Section 2. General:

The following rules have been approved by the National Executive Committee in accordance with the By-Laws of the Association. The Rules and Regulations seek to promote the objects and interests of the Association and its members. In accordance with the said By-Laws, the Rules and Regulations shall be submitted for approval by the National Board of Directors at each Annual Meeting of the Members.

Section 3. Objects:

The Association is a non-profit organization whose object is to promote and foster a national forum and governing body for the affiliation of professionals who offer to the public, governments and employers their expertise in the areas of fraud prevention, detection and investigation. The Association shall, through a process of accreditation, review and continuing education, propagate the Certified Fraud Specialist (CFS) designation in the United States of America amongst its members and to the public as a symbol of the highest unbiased standard of excellence in its field. The Association shall pursue its objects for the benefit of its members and for the benefit of the public at large.

Section 4. Membership:

1. Target Groups: The Association shall recruit and promote membership from the following target groups;

(i) current serving and ex law-enforcement officers;
(ii) internal and external auditors;
(iii) public accountants;
(iv) private and other investigators;
(v) forensic and investigative accountants;
(vi) lawyers; and
(vii) such other groups and professional occupations related to the objects of the Association.

2. Fellow and Regular Members: All fellow and regular members shall be qualified Certified Fraud Specialists and shall possess a valid CFS Designation for the current calendar year.

3. Members without Designation: Member who do not possess a valid, subsisting CFS Designation shall not represent themselves as Certified Fraud Specialists notwithstanding their membership in the Association.

4. Associate Membership: Individuals may apply to the Professional Standards and Admissions Committee for associate membership in a form and accompanied by such prescribed fee, if any, as shall be determined by the NBD from time to time. The Committee may accept applications for associate memberships where the applicant demonstrates to the Committee:

(i) in the case of a full-time student at an approved post-secondary institution, that he or she has the equivalent of 15 or more points calculated in the manner set out herein; or

(ii) in the case of all other applicants, that he or she has the equivalent of 25 or more points calculated in the manner set out herein, provided that the applicant is at least eighteen years of age and has not been convicted of fraud or any fraud-related offense within ten (10) years of the date of application.

5. CFS Designation: Members in good standing may apply to the Professional Standards and Admissions Committee for the designation of Certified Fraud Specialist (the "CFS" Designation) in such form and accompanied by such fee as the NBD may determine from time to time. Upon recommendation by the Committee, the NEC may grant the CFS Designation to applicants who qualify under either of two sets of criteria.

CRITERIA SET NUMBER ONE

(i) The applicant is a member in good standing and;

(ii) demonstrates to the Committee that the applicant has the equivalent of no less than 60 points calculated in the manner set out herein and;

(iii) the applicant has no less than three (3) years of Related Work Experience and;

(iv) the applicant has obtained a passing grade on the Entrance Examination, as those terms are defined hereunder, and;

(v) the applicant supplies authentic and verifiable references of character and integrity pursuant to subparagraph (h) hereunder.

CRITERIA SET NUMBER TWO
(Grand fathering Provision - Senior Professionals)

(i) The applicant is a member in good standing and;

(ii) demonstrates to the Committee that the applicant has the equivalent of no less than 100 points as calculated in Section 4, subsection f, and;

(iii) the applicant supplies authentic and verifiable references of character and integrity pursuant to subparagraph (h) hereunder.

Only members so designated by the NEC shall represent themselves as Certified Fraud Specialists or use the CFS Designation.

6. Calculation of Points: Points shall be calculated for the purposes of determining eligibility for membership or the CFS Designation in the following manner:

(i) Education Related Points

a. applicants shall receive thirty (30) points for each related Bachelor's degree, or fifteen (15) points from each related Associates degree, from an accredited Post-Secondary college or university;

b. if an applicant does not possess a related Bachelor's degree from an accredited Post-Secondary college or university, applicants shall receive five (5) points for each year of full-time Related Post Secondary Education. Credit in this subsection may not be counted in subsection (f) (i) (c) hereunder;

c. applicants shall receive five (5) points for each related certification program administered by an accredited Post-Secondary college or university. Credit in this subsection may not be counted in subsection (f) (i) (b) above;

d. applicants shall receive ten (10) points for each related Approved Professional Designation.

e. applicants shall receive ten (10) points for each related Masters degree from an approved institution;

f. applicants shall receive ten (10) points for each doctorate or doctorate level degree from an approved institution;

provided that the maximum number of points which an applicant or member may accumulate under this section is sixty (60) points.

(ii) Experience Related Points

a. applicants shall receive five (5) points for each full year of Related Work Experience up to a maximum of 85 points;

7. Character References: All applicants for the CFS Designation shall provide three (3) verifiable references of the applicants character and integrity from non-arm's length individuals who have known the candidate personally or professionally for at least two (2) years. The Committee, or such officer, employee or agent as designated by the Committee shall verify the references for authenticity and veracity and the Committee may require additional references from the applicant where there exists a reasonable doubt as to the authenticity, veracity or applicability of any of the references supplied hereunder.

8. Certificate of Membership: All applicants shall receive a Membership Card and a Membership Certificate, upon admission to membership in the Association, bearing the applicants name, class of membership, chapter affiliation and member number.

9. CFS Certificate: Where an applicant for the CFS Designation has demonstrated that he or she has fulfilled all of the required qualifications for admission set out herein and hereunder, and the Professional Standards and Admissions Committee is so satisfied, the Committee shall recommend to the NEC that the applicant be granted the designation of Certified Fraud Specialist and, upon direction of the NEC, shall endorse in the name of the candidate a CFS Certificate.

10. Yearly Accreditation: Each fellow and regular member shall be required to keep their CFS Designation current by obtaining at least twenty four (24) hours of continuing professional education per each Association fiscal year. Sixteen (16) hours of the continuing professional education must be fraud related and the remainder of the hours must be in relation to training and/or education related to the members subject area of practice.

The suitability of any credits for the purposes of yearly accreditation shall be based upon the recommendation of the Professional Standards and Admissions Committee and shall be at the sole discretion of the NEC. Each member shall report education credits to the Professional Standards and Admissions Committee in the manner and form established by the NEC or its designated officers, employees or agents from time to time.

The Association may organize and promote educational and training seminars and conferences which will offer credits to members. Such training activities shall, where possible, be provided in conjunction with the Association's local chapter.

11. Grand fathering: Individuals may apply simultaneously for membership in the Association and for the CFS Designation, and the NEC may waive the requirement that the applicant write the formal Entrance Examination, provided;

(i) that the applicant conforms to the requirements as set out in Criteria Set Number Two of Section 4 (e) above, and;

(ii) that the applicant submit his or her application to the Professional Standards and Admissions Committee together with all fees and required documentation;

provided that the applicant shall in all other respects fulfill the requirements set out herein and in the By-Laws for membership and the CFS Designation.

12. Application Fee: Applicants applying for membership and the CFS Designation, pursuant to the Grandfather Provision, shall pay an application fee of $100.00. If the applicant is successful, will have the first years membership dues waived. If unsuccessful the applicant will be granted Associate Member status and will have the first years membership dues waived. Application fees are non-refundable.

13. Dues: Members shall pay membership fees as follows, subject to such changes as the National Board of Directors may determine from time to time:

(i) Fellow Member; $ 100.00 per annum
(ii) Regular Member; $150.00 per annum
(iii) Associate Member; $ 100.00 per annum
(iv) Honorary Member; No Fee

14. Association Logo: Use of the Association logo is limited to those members in good standing who possess a current and valid CFS Designation, or officials of the Association in the conduct of official Association or chapter business.

Section 5. Discipline:

a. Review of Complaints: The Ethics Committee shall review complaints against members and shall periodically review the conduct and activities of members in order to ensure that such conduct and activities are not inconsistent or contrary to the By-Laws, the Rules and Regulations, the Code of Ethics of the Association or statute.

Where a complaint is filed against a member, or where a member's conduct or activities appear to be contrary to any of the above, or appear to be of a nature likely to bring the Association into dishonor or disrepute, the Committee shall inform the member in writing of the nature of the complaint or of the activities or conduct under review, and shall provide the member with a reasonable opportunity to respond in writing.

b. Determination of Committee: Where the Committee has reviewed the member's written response, if any , and the Committee is satisfied that the conduct or activities of the member are inconsistent or contrary to the By-Laws, the Rules and Regulations, the Code of Ethics of the Association or statute or where the Committee is satisfied that such conduct or activities are of a nature likely to bring the Association into dishonor or disrepute, the Committee shall recommend to the NEC, and the NEC may, upon the Committee's recommendation, suspend or revoke the rights and privileges of the member, including the right to vote and including the member's CFS Designation where appropriate, or may impose such sanctions as it may deem just and consistent with the objects of the Association. The Committee may also recommend to the NEC and the NEC may upon the Committee's recommendation revoke the rights and privileges of a member upon the failure of any member to pay annual fees or other charges due within thirty (30) days of having been notified of the debt by the National Secretary.

c. Right to Appeal: Members who have been subject to disciplinary action pursuant to paragraph 5(b) above have the right to appeal any such decision to the NEC. The NEC may consider the member's appeal and render such final determination as the NEC deems just having regard to the Association's By-Laws, Rules and Regulations and statutes and the facts and circumstances of the case. Appeals to the NEC pursuant to this section shall be in writing, excepting that the members appealing revocation of their membership or revocation of their CFS Designation, shall also have the right to be heard by the NEC.

d. Procedure: Where a member whose membership or CFS Designation has been revoked pursuant to this Section 5, and where the member requests an oral hearing, the NEC shall determine the forum for the hearing and shall in all respects determine the procedure of the hearing. The member requesting the appeal shall bear his or her own costs of the appeal, including the costs of appearing at a hearing, if any.

Section 6. Chapters:

a. Geographic Boundaries: The NEC may approve the formation of local Chapters of the Association. The NEC has formed seven (7) regions within the United States and each state has been assigned to a specific region. Each chapter, as formed, will be assigned a physical, geographical area that will be one-half (½) the distance between that chapter and the nearest other Association chapter. As new chapters form, existing chapter geographical boundaries may be adjusted and chapter members reassigned to the chapter physically nearest their location within the members region. Members shall be entitled to select chapter affiliation.

b. Formation: In accordance with the Articles of Incorporation, the By-Laws and these Rules and Regulations, Chapters shall be formed upon application by ten (10) fellow or regular members within the proposed geographic area and such application shall be subject to approval by the NEC.

c. Chapter Boards: The Chapters shall be directed by a board of directors consisting of no less than three (3) nor more than seven (7) Directors-at-Large for each chapter (the "Chapter Board"). The directors of the Chapter Board shall serve without remuneration and shall govern the activities and affairs of the Chapter and shall report on such activities and affairs to the NEC as and when required by the NEC. Directors shall be elected from amongst the membership within given geographic boundaries, as established by the NEC. The Chapter President shall be the Chairman of the Board of Directors and preside at all meetings. The Chapter President shall be the Chapter Chief Executive Officer.

d. Specific Duties: The Chapter Boards shall organize and coordinate membership recruitment, member training and education within their geographic area. The Chapter Boards shall further coordinate fund raising and assist in the publication of the Association's national newsletter.

e. Annual President's Meeting: Immediately following the annual meeting of the members there shall be held a meeting of the Executive Director, the National President and all of the Presidents of the Chapters.

f. Funding: The NEC may provide the Chapter Boards with startup funding in such amounts as may be determined from time to time.

(i) The Chapters will receive five percent (5%) of the fee payable, by each of Association member from the Chapter's geographic area, who attends any conference or seminar sponsored by the Association;

(ii) The Chapters shall receive Chapter dues, if approved by the NEC, which shall be collected by the Association along with member dues.

(iii) The Chapters shall engage in such further activities as necessary and required to raise funds to permit the Chapter to perform its duties and obligations and to pursue the objects of the Association.

(iv) The Chapters will receive twenty five percent (25%) of the dues paid by members, as referenced under By-Law Article X, Section 8 "Revenues".

g. Financial Statements: The Chapter Boards shall, on behalf of the Chapters, provide the Association with the following financial statements each year; (I) a statement of income and expenses, a balance sheet and a statement of changes in financial position for the previous fiscal year; and (ii) a budget for the upcoming fiscal year.

Section 7. Revisions and Amendments:

The NEC may from time to time make such amendments and revisions to these Rules and Regulations not inconsistent with the Articles of Incorporation or By-Laws of the Association, and such amendments and revisions shall replace and supersede all prior versions hereof.