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On October 9, the Commodity Futures Trading Commission approved proposed rules intended to simplify regulations for commodity pool operators (CPOs) and commodity trading advisors (CTAs) generally by codifying existing staff advisory and no-action letter relief and streamlining registration requirements for CPOs that operate in multiple jurisdictions.
Continue Reading CFTC Approves Proposed Regulations for CPOs and CTAs

On August 9, the National Futures Association (NFA) announced the effective date of its recently adopted Interpretive Notice, Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities. The Interpretative Notice will go into effect on October 31 (“Effective Date”).
Continue Reading NFA Announces the Effective Date of Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities

On March 27, the National Futures Association (NFA) issued Notice I-18-07, reminding commodity pool operators (CPOs), commodity trading advisors (CTAs) and introducing brokers (IBs) to immediately notify NFA by amending the firm-level section of their respective annual questionnaires if they trade any virtual currency products or solicit or accept any order in virtual currency products, as applicable. (See notice I-17-28 and I-17-29, as reported in the Corporate & Financial Weekly Digest edition of January 12, 2018.)
Continue Reading NFA Issues Notice Regarding Reporting Requirements for CPOs, CTAs and IBs That Deal in Virtual Currencies

On December 14, 2017, the National Futures Association (NFA) issued Notices regarding commodity pool operators (CPOs), commodity trading advisors (CTAs) and introducing brokers (IBs), outlining new reporting requirements for CPOs, CTAs and IBs that deal in virtual currencies.
Continue Reading NFA Issues Notice of Additional Reporting Requirements for CPOs and CTAs That Trade Virtual Currency Products and IBs that Solicit or Accept Orders in Virtual Currency Products

On December 11, at the request of the Futures Industry Association (FIA), the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (Division) issued an interpretive letter regarding the “solely incidental” exclusion from registration as a commodity trading advisor (CTA). Under the relevant provisions of the Commodity Exchange Act and CFTC rules, a futures commission merchant (FCM), swap dealer (SD) or introducing broker (IB) that provides commodity trading advice is required to be registered separately as a CTA unless such advice is “solely incidental” to the conduct of such registrant’s business as an FCM or SD (or “solely in connection with” such registrant’s business as an IB).
Continue Reading CFTC Staff Issues Interpretive Guidance Clarifying Commodity Trading Advisor Registration Requirements Resulting from the European Union’s MiFID II Research Compensation Provisions for Investment Managers

On September 13, the Division of Swap Dealer and Intermediary Oversight (DSIO or Division) of the Commodity Futures Trading Commission (CFTC or Commission) granted no-action relief from commodity pool operator (CPO) and commodity trading advisor (CTA) registration to a private university, subject to certain conditions. At issue was (1) the university’s collective management of an endowment fund that includes the funds of multiple organizations affiliated with the university (Affiliated Organizations); and (2) the offering, solicitation and operation of multiple planned giving arrangements for donors to the university, which generally provided for a periodic income stream to identified beneficiaries for a specified period of time before the donation reverted wholly to the university’s benefit (Planned Giving Accounts).
Continue Reading CFTC Provides No-Action Relief From CPO and CTA Registration to a Private University

The Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) has issued exemptive relief to commodity trading advisors (CTAs) from the requirement to keep records under CFTC Regulations 4.7(c)(2) and 4.33 at the CTA’s main business office. As provided in the exemptive letter, a CTA may use a third-party recordkeeper so long …

As part of a global regulatory initiative, the United States, European Union, Canada, Switzerland, Japan, Hong Kong, Singapore and Australia have all adopted, or are in the process of adopting, rules (Margin Rules) that impose mandatory variation margin requirements on non-cleared swaps and, in some cases, non-cleared security-based swaps and FX derivatives (collectively, “Covered Trades”). Starting March 1, any entity that is a financial end user (FEU) will only be able to execute a Covered Trade with a US swap dealer if it has amended its swap documentation to comply with the requirements applicable to the dealer under the Margin Rules.
Continue Reading 40 Days Left Until Compliance Date for Variation Margin Rules for Uncleared Swaps

On January 11, National Futures Association (NFA) issued Notice I-17-02, which reminds NFA members of their obligations with respect to commodity pool operators (CPOs) and commodity trading advisors (CTAs) exempt from registration. The Commodity Futures Trading Commission requires any person claiming an exemption from CPO registration under CFTC Regulation 4.13(a)(1), 4.13(a)(2), 4.13(a)(3), 4.13(a)(5), an exclusion from CPO registration under Regulation 4.5, or an exemption from CTA registration under Regulation 4.14(a)(8) to affirm the applicable notice of exemption annually within 60 days of the calendar year end. Failure to complete the affirmation process is considered a request to withdraw from the exemption and, therefore, entities that do not affirm may be required to be registered with the CFTC and become NFA Members.
Continue Reading NFA Issues Notice to Members Regarding CPO/CTA Exemption Affirmations

On September 6, the National Futures Association (NFA) filed with the Commodity Futures Trading Commission for approval an amendment to NFA Compliance Rule 2-46 (CPO and CTA Quarterly Reporting Requirements) and a proposed NFA Interpretive Notice NFA Compliance Rule 2-46: Reporting Financial Information on NFA Forms PQR and PR. NFA Compliance Rule 2-46 requires member commodity pool operators (CPOs) and commodity trading advisors (CTAs)(with reporting requirements under CFTC Regulation 4.27) to file NFA Forms PQR and PR, respectively, on a quarterly basis. Such forms collect general identifying information regarding member CPOs/CTAs in addition to specific information on the pools operated by such CPOs and the assets directed by such CTAs.
Continue Reading NFA Proposes Amendments to CPO and CTA Quarterly Reporting Requirements