On July 20, the National Futures Association (NFA) submitted to the Commodity Futures Trading Commission for approval a proposed interpretive notice regarding Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities. The new disclosure obligations will apply to all NFA members engaging in transactions in virtual currency derivatives and virtual currency, as well as other activities in underlying or spot virtual currencies.

The proposed interpretive notice addresses NFA’s concerns that investors may not fully understand the nature of virtual currencies and virtual currency derivatives, the substantial risk of loss that may arise from trading these products, and the limitations of NFA’s regulatory authority over the spot market in virtual currencies.

NFA is invoking the “ten-day” provision of Section 17(j) of the Commodity Exchange Act and plans to make this Interpretive Notice effective 10 days after filing with the CFTC, unless the CFTC notifies NFA that it has determined to review the proposed Interpretive Notice for approval.

More details relating to the interpretive notice are available in Gary DeWaal’s July 27, 2018 Between Bridges issue of Bridging the Week.