Subordinated Loan Agreement

CFTC Regulation 1.17 defines assets and liabilities that affect a firm's net capital position. When computing net capital, a futures commission merchant (FCM) or introducing broker (IB) may exclude a liability that is subordinated to the claims of all general creditors pursuant to a satisfactory subordination agreement. A subordinated loan agreement (SLA) must be filed with NFA at least ten days prior to the proposed effective date of the agreement. In order to facilitate the approval process for SLAs, NFA recommends using the following templates: