Swap Registration FAQs
Section 1a (49) of the Commodity Exchange Act (CEA) defines, in general, an SD as a person (which includes entities) that: holds itself out as a dealer in swaps; makes a market in swaps; regularly enters into swaps with counterparties as an ordinary course of business for its own account; or engages in any activity causing the entity to be commonly known in the trade as a dealer or market maker in swaps. Firms that meet the above criteria are required to register once the gross notional amount of their swap dealing activity exceeds the de minimis threshold, currently $8 billion, over a twelve month period.
Regulatory information for SDs is available on NFA's website.
A firm acting as an FCM, IB, CPO or CTA with respect to swaps subject to the jurisdiction of the CFTC must register as a swap intermediary through NFA's Online Registration System.
Swaps FCMs, CPOs and CTAs that properly claim an exclusion or exemption from registration are not required to register. An asset manager for hedge funds that engages in swaps activity, however, might have to register as a CTA. Similarly, a firm that acts as a voice broker in swaps might have to register as an IB.
Regulatory information for swap intermediaries is available on NFA's website.
An associated person (AP) of an SD or MSP is not required to be registered. However, Section 1a(4) of the CEA and CFTC Regulation 1.3 define an AP 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 AP 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. See Registration Information for Swap Dealers and Major Swaps Participants for more information.
SDs and MSPs are required to be registered with the CFTC. Firms register with the CFTC through NFA's Online Registration System (ORS) (see Begin Enrollment on how to obtain access to ORS). SDs and MSPs begin the application process by submitting:
- A completed online Form 7-R application (includes NFA membership sections)
- A completed online Form 8-R application, fingerprint cards, and a non-refundable applicant fee of $85 for each principal
- A non-refundable application fee of $15,000
- 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 the 4s 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), the application fee of $15,000 and facially reviews 4s documentation, NFA will notify the applicant that it is provisionally registered. See the registration process for SDs and MSPs for more information.
NFA makes available an SD Registry which contains a listing of SDs and their CFTC registration status.
CFTC Regulation 170.16 requires each registered SD to become and remain a member of at least one registered futures association. All SDs must become Members of NFA in order to conduct swaps business with the public. See Registration Information for Swap Dealers for more information.
A firm that conducts swaps activity can only claim swaps exclusive status if the only regulated activity the firm conducts is swaps activity.