The Registration Process
SDs and MSPs are required to be registered with the CFTC. Firms register with the CFTC through NFA's Online Registration System (ORS). SDs and MSPs begin the application process by submitting a completed Form 7-R application, a completed Form 8-R application and fingerprint cards for each of its principals, the application fee and documentation required to demonstrate compliance with CFTC regulations Implementing Sections 4s(e), 4s(f), 4s(g), 4s(h) and 4s(i) of the CEA (Section 4s Implementing Regulations*) that have an effective compliance date as of the completed registration application date and are applicable to the applicant. SDs and MSPs must submit this documentation to NFA for review via its web-based Registration Documentation Submission System (RDSS), which is part of NFA's EasyFile system. Once NFA receives the completed Form 7-R application (and required Forms 8-R) and 4s documentation, NFA will notify the applicant that it is provisionally registered.
CFTC Regulation 170.16 requires each registered SD and MSP to become and remain a member of at least one registered futures association. All SDs and MSPs must become Members of NFA in order to conduct swaps business with the public.
SDs and MSPs are required to file the following:
SDs and MSPs are required to file the following for each of their principals
The CFTC's registration rules applicable to SDs and MSPs require registration of the SD or MSP entity—not an office location. Therefore, a person that meets the CFTC's final definition of SD or MSP and is engaging in swaps (as defined by the CFTC) activity must register in the appropriate category. SDs and MSPs are not required to disclose on their Forms 7-R the branch office locations in which persons are located who are associated with the SD or MSP in any capacity that involves the solicitation or acceptance of swaps or the supervision of any person so engaged.
An SD or MSP also is required to list those individuals that meet the definition of principal in CFTC Regulation 3.1(a). For example, each member of the Board of Directors of an SD or MSP must be listed as a principal. Members of the Board of Directors of the parent company of an SD or MSP, however, are not considered principals of the registered entity based on that function alone. Moreover, an individual that is solely in charge of an SD's or MSP's business unit that is not involved in swaps likely would not have to be listed as a principal based on that function alone.
Associated Persons (AP) of SDs or MSPs
Section 1a(4) of the CEA and CFTC Regulation 1.3(aa)(6) define an Associated Person of an SD or MSP as a natural person who is associated with an SD or MSP in any capacity that involves the solicitation or acceptance of swaps or the supervision of any person so engaged. Section 4s(b)(6) of the CEA and CFTC Regulation 23.22(b) prohibit SDs and MSPs from permitting an Associated Person of an SD or MSP who is subject to a statutory disqualification under Section 8a(2) or 8a(3) of the CEA to effect or be involved in effecting swaps on behalf of the SD or MSP, if the SD or MSP knows, or in the exercise of reasonable care should know, of the statutory disqualification.
Associated Persons of an SD or MSP do not need to be registered with the CFTC and none of NFA's current proficiency requirements apply to Associated Persons of an SD or MSP.
However, it is the SD/MSP's obligation to determine whether or not a statutory disqualification exists for one of its APs. If a statutory disqualification exists, the SD/MSP may elect to electronically file a Statutory Disqualification Form via NFA's EasyFile system for a determination as to whether NFA would have granted the person registration as an AP despite the statutory disqualification.
Click here for more information regarding the AP Statutory Disqualification Form Submission Process.
*The CEA imposes substantive ongoing compliance requirements for SDs/MSPs in a number of areas including capital and margin, reporting and recordkeeping, daily trading records, business conduct standards, documentation standards, monitoring of trading, risk management procedures, disclosure of information, ability to obtain information, conflicts of interest, segregation of collateral, and a requirement that each SD/MSP designate a chief compliance officer who is a principal of the firm. The CFTC has proposed and is in the process of finalizing the Section 4s Implementing Regulations pertaining to these ongoing compliance requirements.**Form 7-R and Form 8-R applications are filed over the Internet via NFA's Online Registration System (ORS).
***An application fee is not required if the individual is currently registered with the CFTC in any capacity or is listed as a principal of a current CFTC registrant.
Contact NFA's Information Center if you need assistance or have any questions concerning the registration process. Our knowledgeable and helpful Information Center representatives are available from 8:00 a.m. to 5:00 p.m. CST, Monday through Friday, to answer your questions and provide additional information on any NFA-related topic. Questions on the substantive requirements of the Section 4s Implementing Regulations should be directed to the CFTC staff contacts identified in the respective rulemaking.
Contact the Information Center by phone at 312-781-1410 or 800-621-3570, or send an email to email@example.com.
NFA Members can file many of their required documents electronically.