Notices to Members

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Notice I-12-33

December 19, 2012

Application of NFA Assessment Fee to Proprietary Trading Firms that May Be Subject to CPO Registration

NFA Bylaw 1301 provides an exemption from the NFA assessment fee for persons who have privileges of membership with the exchange at which the contract is traded. This exemption from the fee does not apply, however, to pools operated by CPO Members of NFA. As explained below, recent changes to CFTC regulations regarding exemptions from CPO registration could impact the application of the NFA assessment fee rule.

In February 2012, the CFTC issued final rules amending a number of CFTC Regulations rescinding certain exemptions from CPO/CTA registration, which have a compliance date of December 31, 2012. Though it is not entirely clear, the CFTC could take the position that under certain circumstances proprietary trading firms could be deemed to be commodity pools and the firms themselves subject to CPO registration. These proprietary trading firms, which provide a significant percentage of overall trading volume, could then lose their current exemption from NFA's assessment fee.

If such proprietary trading firms are required to be registered as CPOs, the application of the NFA assessment fee to such firms is an issue that would have to be considered by NFA's Board of Directors. Until the Board resolves this issue, FCMs are hereby notified that for any proprietary trading firms that become registered as CPOs, if their trading accounts were exempt from the NFA assessment fee as of December 31, 2012, they will remain exempt from the assessment fee until further notice from NFA.

If you have any questions regarding this Notice, please contact Michael Saturley, Director, Treasurer's Office at or 312-781-1386.

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