The National Futures Association (NFA) has updated its Background Affiliation Status Information Center (BASIC) system to help NFA members conducting Bylaw 1101 due diligence to determine whether the commodity pool operator (CPO) of a particular commodity pool is properly registered or exempt from CPO registration. As reported in the Corporate and Financial Weekly Digest edition of October 17, 2014, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) provided self-executing relief from registration to certain would-be CPOs that delegate all of their investment management authority with respect to a particular pool to another registered CPO. As a result of such delegations, NFA members conducting Bylaw 1101 due diligence on a pool are not always able to readily identify the pool’s CPO and confirm through NFA’s BASIC system whether the CPO of that pool is an NFA member.
To help members identify delegation when conducting Bylaw 1101 due diligence, CPOs are now required to provide information in NFA’s EasyFile system when filing a pool’s annual financial statement that indicates whether the CPO has delegated investment management authority of a particular commodity pool pursuant to the DSIO relief. This information will be publicly available in NFA’s BASIC system and an NFA member generally will be deemed to have satisfied its Bylaw 1101 due diligence obligations if the pool in question is listed in BASIC under a new “Delegated Pools” heading.
NFA Notice I-15-13 is available here.