On December 12, National Futures Association (NFA) submitted to the Commodity Futures Trading Commission proposed amendments to the Interpretive Notice to NFA Compliance Rule 2-45 (Prohibition of Loans by Commodity Pools to CPOs and Related Entities).

The amended Interpretive Notice would allow a commodity pool operator (CPO) to cause a loan to be made, in certain circumstances, from a pool to a wholly owned subsidiary of the pool without violating NFA Compliance Rule 2-45. Among other conditions, such loans must be made either (i) by a single pool to a single subsidiary that is formed for trading purposes and operated by a registered CPO or (ii) to a wholly owned subsidiary that is a registered broker-dealer where the subsidiary is formed solely to provide clearing and other prime brokerage services and other conditions are met. 

The amended Interpretive Notice also reminds NFA Member CPOs of their obligation to make books and records available to NFA pursuant to NFA Compliance Rules 2-10 and 2-5, including the books and records of any wholly owned subsidiary of a commodity pool. 

NFA plans to make the proposed amendments effective on December 22 unless the CFTC notifies NFA that it plans to review the proposal for approval. 

The NFA letter is available here.