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CFTC grants NFA authority to review CPO annual financial reports

On January 9, 2003, the Commodity Futures Trading Commission (CFTC) announced that it had granted the authority to conduct reviews of annual financial reports filed by commodity pool operators (CPOs) to NFA. This new regulatory responsibility will begin with reports for financial years ending on December 31, 2002 and later.

"NFA is constantly looking for new ways to make the regulatory process more efficient and to assist Members by reducing their regulatory burdens without lessening customer protection," said NFA President Dan Roth. "This review program will eliminate the need for CPOs to file duplicate copies of their financial reports with NFA and the CFTC."

The delegation of this new responsibility to NFA is a reflection of the CFTC's mission to assume more of an oversight role in the futures industry.

"We are better positioned to respond to the changes in the futures markets by authorizing NFA to perform such functions, enabling Commission staff to focus on new regulatory issues and making the Commission more efficient in carrying out its regulatory responsibilities," said CFTC Chairman James Newsome.

Throughout NFA's history, the CFTC has authorized NFA to conduct additional regulatory functions. As a result, NFA now processes registration applications for all futures industry participants, initiates actions to revoke and/or deny registrations, acts as agent for service of process for foreign firms under Part 30 of the Commodity Exchange Act and reviews CPO and CTA Disclosure Documents.

In conjunction with this new responsibility, NFA collaborated with the CFTC to implement technology that will allow CFTC staff to review, access and query the information NFA maintains in its databases electronically.

"We support the Commission's mission to delegate more of its regulatory functions to NFA in order to focus its efforts on regulatory oversight," said Roth. "Actions like the one taken today will benefit not only the CFTC and NFA, but the entire futures industry."

NFA is the premier independent provider of efficient and innovative regulatory programs that safeguard the integrity of the derivatives markets.
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