Swap Proficiency Requirements FAQs

The following individuals are required to satisfy NFA's Swaps Proficiency Requirements:

  • Any individual registered as an associated person (AP) of a futures commission merchant (FCM), introducing broker (IB), commodity pool operator (CPO) or commodity trading advisor (CTA) who engages in swaps activity subject to the CFTC's jurisdiction.
  •  With the exception of certain individuals acting as APs at swap dealers (SD) in non-U.S. jurisdictions (as noted in the chart below), any individual who is acting as an AP at an SD as defined by the CFTC in subsection 6 of the Associated Person definition under CFTC Regulation 1.3. NFA's Swaps Proficiency Requirements in no manner alter this definition.

The chart below shows the applicability of NFA's Swaps Proficiency Requirements to individuals acting as APs at SDs based on the SD's location and type of counterparty.  As shown in the chart below, NFA's Swaps Proficiency Requirements do not apply to individuals acting as APs at SDs in non-U.S. jurisdictions (including non-U.S. based branch offices of a U.S. SD) in specified circumstances.

Counterparty Type

Category A –
U.S. Person (other than a Non-U.S. Branch of an SD)
Category B – Non-U.S. Branch of a U.S. SD Category C – Non-U.S. Person Guaranteed by or Affiliate Conduit of a U.S. Person Category D – Non-U.S. Person Category A and
Category B, C or D
U.S. AP of a U.S. SD (including an affiliate of a Non-U.S. person) who solicits or accepts swaps with: Apply Apply Apply Apply Apply
AP of a Non-U.S. Branch of a U.S. SD who solicits or accepts swaps with: Apply Does Not Apply Does Not Apply Does Not Apply Apply
AP of a Non-U.S. SD (including any Branch and affiliate of a U.S. person) who solicits or accepts swaps with: Apply Does Not Apply Does Not Apply Does Not Apply Apply

 

An AP who engages in swaps transactions with a Category A counterparty must satisfy NFA's Swaps Proficiency Requirements regardless of whether the AP also engages in swaps transactions with counterparties from Categories B, C or D. 

For example, an AP at a non-U.S. branch of a U.S. SD who only engages in swaps transactions with other non-U.S. branches of U.S. SDs would not be required to satisfy NFA's Swaps Proficiency Requirements.  However, if that AP also engages in swaps transactions with a U.S. person (excluding a non-U.S. branch of a U.S. SD), then the AP would be required to satisfy NFA's Swaps Proficiency Requirements. 

APs of non-U.S. SDs (including non-U.S. SDs that are affiliates of a U.S. person) whose counterparties are limited to non-U.S. branches of U.S. SDs and non-U.S. persons are not required to satisfy NFA's Swaps Proficiency Requirements. 

NFA's Swaps Proficiency Requirements have two tracks: the Long Track and the Short Track.  Each Track is module based and contains both a learning component and a testing component.     

The Long Track consists of eight modules and a total of 100 test questions: 

  • Swap Products and Applications (20 test questions)
  • Regulation of the Swaps Market (20 test questions)
  • Onboarding (10 test questions)
  • Transactional Disclosures (10 test questions)
  • Anti-Fraud and Ethical Practices (10 test questions)
  • Trade Execution/Clearing/Margin (10 test questions)
  • Risk Management (10 test questions)
  • Supervision (10 test questions)

 The Short Track consists of four modules and a total of 60 test questions: 

  • Swaps Products and Applications (20 test questions)
  • Regulation of the Swaps Market (20 test questions)
  • Supervision (10 test questions)
  • Compliance, Anti-Fraud, and Other Requirements (10 test questions)

Individuals Acting as APs at SDs

In general, SDs must ensure that individuals acting as APs satisfy the Long Track.  SDs must also ensure that individuals responsible for supervising individuals acting in the capacity of APs satisfy the Long Track.

Some SDs have designated as APs individuals who are not in the SD's sales and trading areas and who do not negotiate, price and/or execute swaps with counterparties on behalf of the SD or manage the SD's swap related risks (sales and trading activities).  For these individuals designated as APs, the SD has the option of requiring the individual to satisfy the Long Track or the Short Track.  Similarly, for individuals supervising persons designated as APs but engaged in activities that do not involve sales and trading activities, the SD has the option of requiring those supervising individuals to take the Long Track or the Short Track. 

Swap APs at Intermediary Firms – FCMs, IBs, CPOs an CTAs

Individuals approved as or applying for approval as an FCM, IB, CPO or CTA Member swap firm or swap associated person of an FCM, IB, CPO or CTA Member (intermediary swap AP) are required to satisfy the Short Track.   

Individuals who are responsible for supervising intermediary swap APs are also required to satisfy the Short Track. 

An intermediary swap AP or AP of an SD (collectively, swap AP) who successfully completes the Short Track and moves into a role requiring completion of the Long Track may satisfy NFA's Swaps Proficiency Requirements by completing the remaining modules of the Long Track.

An AP of an SD who is also an intermediary swap AP must successfully complete the Long Track in order to satisfy NFA's Swaps Proficiency Requirements if the SD requires that the individual satisfy the Long Track.

A swap AP who satisfies the Long Track and then transfers to a role that only requires the Short Track will be deemed to have satisfied the proficiency requirements.

The Compliance Date to satisfy NFA's Swaps Proficiency Requirements is January 31, 2021.  NFA's rules requiring the Swaps Proficiency Requirements will become effective on January 31, 2020, at which time APs will be able to access and take the proficiency requirement online.  Individuals who are currently approved as a swap AP at an FCM, IB, CPO or CTA Member firm or act as an AP at an SD and intend to continue acting in this capacity after the Compliance Date have until January 31, 2021 to satisfy the applicable NFA Swaps Proficiency Requirements.  

Those individuals who do not satisfy the applicable Requirements by the Compliance Date will not be able to act as a swap AP until NFA's Swaps Proficiency Requirements have been satisfied.  Additionally, if a swap AP at an intermediary Member firm does not satisfy the Requirements by the Compliance Date, the individual's swaps approval status will be changed to pending.    

Individuals seeking to engage in swaps activities at an FCM, IB, CPO or CTA Member firm after the Compliance Date must satisfy NFA's Swaps Proficiency Requirements in order to be approved as a swap AP and to engage in swaps activities.  SDs must ensure that individuals seeking to act as an AP at an SD after the Compliance Date have satisfied NFA's Swaps Proficiency Requirements prior to engaging in AP activities.

NFA estimates that the Long Track can be completed in approximately eight hours, and the Short Track in approximately four hours.  APs will be required to go through the learning component and then pass the testing component for each module.

NFA recognizes that the estimated completion times for the Short Track and Long Track are significant time commitments.  To minimize interruption to daily job functions,  individuals may complete all of the required modules in one sitting or may complete the required modules one at a time, as their time and schedule permit, so long as all required modules are completed by the Compliance Date (January 31, 2021).  In addition, individuals may retake each learning and testing component as many times as necessary in order to pass.  After the Compliance Date, individuals may continue to take the modules one at a time, however, all modules must be successfully completed prior to engaging in AP activities at an SD or being approved as a swap AP at an FCM, IB, CPO or CTA Member.
NFA's Swaps Proficiency Requirements will be administered online.  Individuals will not be required to travel to a separate testing location.

No.  Similar to the Series 3 and Series 34 proficiency requirements for futures and forex APs, there is no continuing education component to NFA's Swaps Proficiency Requirements. 

An individual will not have to satisfy NFA's Swaps Proficiency Requirements again provided the Track previously completed satisfies the Track required by the individual's new position and since the date the individual satisfied NFA's Swaps Proficiency Requirements, there has been no two-year period during which the individual was not employed by an NFA Member SD (or its affiliated entity) or approved as a swap AP at an intermediary swap firm. 

If the individual satisfies the condition described above but previously satisfied the Short Track and will be acting in a capacity that requires that the individual satisfy the Long Track, the individual will only need to take and pass the remaining modules of the Long Track.  

NFA is developing an automated tool that will allow Members to verify that an individual who satisfied NFA's Swaps Proficiency Requirements while acting as an AP at an SD has successfully completed the appropriate track of NFA's Swaps Proficiency Requirements and the date of completion. 

The information for APs of intermediary firms who satisfied NFA's Swaps Proficiency Requirements will be available in ORS. 

Individuals Associated with an NFA Member Firm

There is no fee to enroll in NFA's Swaps Proficiency Requirements for individuals associated with an NFA Member SD or swap-approved FCM, IB, CPO or CTA.  The cost of enrollment in NFA's Swaps Proficiency Requirements for these individuals is included in annual SD and FCM, IB, CPO and CTA membership dues.    

Individuals Not Associated with an NFA Member Firm

Individuals who are not associated with an NFA Member firm but seek to satisfy NFA's Swaps Proficiency Requirements for professional or other reasons are required to pay a fee of $100 to take either the Long Track or the Short Track. 

Individuals must achieve a score of 70 percent or greater on each module within the individual's assigned/chosen track in order to receive a Certificate of Completion.

No.  Although individuals may take the modules at their own pace, the learning component of the modules must be viewed prior to entering the test for each module.  Modules will appear in the order set forth in their assigned/chosen Track (Long or Short), with the learning component of the module followed by the testing component.  Individuals will be not be able to access the next module in the Track until they have viewed the previous module's learning component and completed the test for that module.  Individuals will complete modules one by one as they follow through their assigned Track. 

A score of 70 percent or greater is required to pass each module.  An individual who receives a score of less than 70 percent on any module will be prompted to retake the failed module after the individual has completed the remaining modules in the Track.  The individual will retake any failed modules in the order in which they appeared in the individual's Track.  After a certain number of attempts an individual may retake the modules in any order until the individual achieves a score of 70 percent or greater. 

NFA's Swaps Proficiency Requirements is only offered in English.