On November 5, 2015, the Commodity Futures Trading Commission’s (“CFTC”) Division of Swap Dealers and Intermediary Oversight (“DSIO”) published a Frequently Asked Questions (“FAQs”) regarding Form CPO-PQR (“Form PQR”) and Form CTA-PR (“Form PR”). Generally, the Form PQR is a quarterly report filed by commodity pool operators (“CPOs”) and the Form PR is a quarterly report filed by commodity trading advisers (“CTAs”). The DSIO FAQs includes fifty-three (53) questions regarding Form PQR and twelve (12) questions pertaining to Form PR. The purpose of the FAQs was for the DSIO to address technical issues, filing requirements, reporting thresholds, the different schedules of the Form PQR, specific questions on the Form PR, and report deadlines. The complete FAQs are available online. The DSIO will update the FAQs on an as needed basis.
In response to the CFTC’s FAQ, referenced above, the National Futures Association (“NFA”) released Notice to Members No. I-15-25 (the “Notice”). The Notice was published on November 10, 2015. The purpose of the Notice was to also address frequently asked questions they have received from Members regarding Forms PQR and PR. The NFA published CTA FAQs and CPO FAQs to provide guidance on EasyFile logistics for filing Forms PQR and PR. The Notice provides additional information addressing EasyFile logistics for filing the forms and the different resources the NFA has made available to assist firms with filing requirements.
The NFA released a revised regulatory guide regarding forex transactions (“Regulatory Guide”). The Regulatory Guide was updated to incorporate amendments to NFA Compliance Rule 2-36, Financial Requirements Section 11 and 12 and the adoption of the Interpretive Notice entitled “NFA Compliance Rule 2-36: Risk Management for Forex Dealer Members” effective January 4, 2016. The September Housekeeping, Reminders and Updates provided detailed information regarding the CFTC’s approval of the NFA proposed changes to forex dealer member requirements.
The purpose of the Regulatory Guide is to provide Members who are subject the new forex requirements understand those requirements. The Regulatory Guide is a follow up to Notice I-15-21, published in September, addressing the CFTC’s approval of new forex dealer Member requirements. The complete Regulatory Guide is available online and the new requirements are effective January 4, 2016.
As a reminder, Members and Registrants of the NFA have the responsibility of completing certain requirements on an annual basis. The following list is provided as guidance for regulatory requirements that might need to be addressed before year-end. This list does not capture all requirements.
- Complete the Annual Update on the anniversary date of the firm’s registration which includes:
- Annual Registration Update;
- Annual Questionnaire, which includes firm and disaster recovery information as well as a questionnaire for each category of registration; and
- Payment of annual registration fees and NFA dues.
- Appropriate supervisory personnel are required to review the NFA’s Self-Exam Questionnaire and sign attestation documenting review;
- Review and test the firm’s business continuity and disaster recovery plan;
- Provide ethics training as outlined in the firm’s written policies and compliance procedures;
- Provide every current customer with the firm’s privacy policy; and
- Annual affirmation of exemptions or file any new exemptions.
NOTE: Failure to satisfy all the requirements in the annual update process within thirty (30) days of the firm’s anniversary date will be deemed a request to withdraw its NFA registration and/or Membership.
For further information about any of the topics covered, please feel free to contact the Ruddy Law Office, PLLC (www.ruddylaw.com) or 202-797-0762.
