The Dodd-Frank Act of 2010 amended the definitions of FCM, IB, CPO and CTA to include "swaps." On August 13, 2012, the CFTC published final rule definitions for "swaps", "security-based swaps" and "security-based swap agreement". Therefore, any IBs that are not currently registered but are acting as an IB with respect to swaps subject to the jurisdiction of the CFTC must file to be registered with the CFTC on or before December 31, 2012, and be approved as a swap designated IB Member of NFA.
In addition, any person associated with a newly registering IB that engages in activities involving swaps subject to the jurisdiction of the CFTC must register as an Associated Person (AP) and be appointed as a swap designated AP. At this time, there are no proficiency requirements for APs whose activities are limited solely to swaps.
Also beginning January 1, 2013, currently registered IBs whose activities include swaps that are subject to the jurisdiction of the CFTC will have to be approved as an NFA Member swap designated firm. Any person associated with an IB who engages in activities involving swaps subject to the jurisdiction of the CFTC must be registered as an AP and be approved as a swap designated AP by NFA in order to engage in swaps activities on behalf of such Member. Again, if the AP's activities are limited solely to swaps, there are no proficiency requirements.
No Member may be approved as a swap firm unless at least one of its principals is registered as an AP and approved as a swap designated AP. IBs can apply to become a swap designated IB by completing the online Form 7-R using NFA's Online Registration System (ORS). Contact NFA's Information Center by phone at 312-781-1410 or 800-621-3570 or send an email to information@nfa.futures.org if you need assistance or have any questions concerning the registration process.
By: John Brand
Managing Director, Compliance | National Futures Association
jbrand@nfa.futures.org
