On September 12, the National Futures Association issued Notice I-18-15, announcing that the amendments to NFA’s Interpretive Notice entitled NFA Compliance Rule 2-30(b): Risk Disclosure Statement for Security Futures Contracts (Interpretive Notice) will become effective on October 12.
NFA Compliance Rule 2-30(b) requires members and associates who are registered as brokers or dealers under Section 15(b)(11) of the Securities Exchange Act of 1934 to provide a risk disclosure statement for security futures products (SFP) to a customer at or before the time the member approves the account to trade SFPs. This statement describes the characteristics and risks of SFPs.
The amendments to the Interpretive Notice were submitted to the Commodity Futures Trading Commission on June 7 and August 21. The June 7 amendment changes the normal clearance and settlement cycle for securities transactions from three (3) business days to two (2) business days with respect to clearing a broker’s settlement with the National Securities Clearing Corporation. The August 21 amendment changes the cash portion of a customer’s account that the Securities Investor Protection Corporation (SIPC) will cover from $100,000 to $250,000. The SIPC covers assets of its customer’s members, up to $500,000, in the event that the broker-dealer holding those assets becomes insolvent.
Notice I-18-15 is available here.
The June 7 proposed amendment is available here.
The August 21 proposed amendment is available here.