Swap Registration FAQs
Section 3.1 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 a futures commission merchant (FCM), an introducing broker (IB), commodity pool operator (CPO) or commodity trading advisor (CTA) with respect to swaps subject to the jurisdiction of the U.S. Commodity Futures Trading Commission (CFTC) must register as a swap intermediary through NFA's Online Registration System.
Swap 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.
For more information on swap intermediaries, see Notice to Members I-12-24.
An AP of an SD or major swap participant (MSP) is not required to be registered. However, CFTC Regulation 1.3 defines 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. CFTC Regulation 23.22(b) prohibits SDs and MSPs from permitting an AP of an SD or MSP, who is subject to a statutory disqualification, 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. An AP of an SD must complete NFA's Swaps Proficiency Requirements. See Registration Information for Swap Dealers and Major Swaps Participants for more information.
What are the steps in the registration process for a swap dealer (SD) or a major swap participant (MSP)?
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
- A completed NFA Membership application
- A completed online Form 8-R application, fingerprint cards, and a non-refundable applicant fee of $85 for each principal
- Non-refundable application fee of $15,000
- Non-refundable SD membership dues
Effective immediately, each SD will no longer be required to submit 4s documentation for any 4s topic area (except for certain documentation related to an SD's risk management program), and NFA will not issue Feedback Letters. Rather, an SD will satisfy the requirement that it demonstrate compliance with each section 4s implementing regulation by submitting an attestation that the SD has adopted policies and procedures or other appropriate documentation reasonably designed to ensure that the SD is in compliance with the CFTC Regulations. In effect, the attestation will constitute the 4s documentation that is required to be submitted pursuant to CFTC Regulation 3.10(a)(v)(A).
SDs and MSPs must submit the attestation via the web-based Registration Documentation Submission System (RDSS), which is part of NFA's EasyFile system.
Once NFA receives the completed Form 7-R and NFA memberships application (and required Forms 8-R), the application fee of $15,000, the non-refundable SD membership dues, 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. The registry is password protected. Members and registrants must input their ORS username and password to access the Registry.
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 NFA Members in order to conduct swaps business with the public. See Registration Information for Swap Dealers for more information.
What are the proficiency requirements for an AP of an FCM, IB, CPO or CTA whose activities are limited to swaps?
APs whose activities are solely limited to swaps must satisfy NFA's Swaps Proficiency Requirements.
A firm that conducts swaps activity as a CPO, CTA, FCM and/or IB can only claim swaps exclusive status if the only regulated activity conducted by the firm is swap activity. The registration filing requirements are the same as those for any other applicant, and APs of a swap-exclusive firm must satisfy NFA's Swaps Proficiency Requirements. See registration and filing requirements for CPOs, CTAs, FCMs and IBs on the Registration and Membership page.