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April 24, 2013
Effective Date of Amendments to NFA Compliance Rule 2-46: CPO and CTA Quarterly Reporting Requirements
NFA Compliance Rule 2-46 requires NFA Member CPOs to file on a quarterly basis Form PQR disclosing certain specified information with NFA for each pool (with certain exceptions) that it operates. Last year, the CFTC adopted similar requirements under CFTC Regulation 4.27, which require CPOs to file certain information on CFTC Form CPO-PQR with the CFTC on a quarterly or annual basis depending on the CPOs Assets under Management (AUM) and require CTAs to make an annual filing on the CFTC Form PR with the CFTC. Both the CFTC Form PQR and PR are filed with NFA through the EasyFile System.
In order to simplify the process and minimize the filing of duplicative information, NFA has amended Compliance Rule 2-46. First, NFA has extended its reporting deadlines to match those provided by the CFTC. Second, NFA's Form PQR has been amended to be more comparable to the CFTC Form PQR. For example, NFA has amended the itemization threshold in the Schedule of Investment to align with the CFTC Form Schedule B. However, CPOs that are solely filing with NFA will find that NFA Form PQR will only include certain of the questions included in the CFTC's form.
Although the amendments to NFA Compliance Rule 2-46 also impose a new quarterly filing requirement on CTAs, NFA has not finalized the date of the first required filing. NFA will advise CTA Members of the date of the first quarterly report, and provide filing information and instructions, well in advance of that date. No report will be due for the quarters ended March 31 or June 30, 2013.
CFTC Requirements under Regulation 4.27
Under CFTC Regulation 4.27, filing requirements differ depending on the size of the CPO's AUM. Small CPOs (AUM of less than $150 million) are required to file CFTC Form CPO-PQR Schedule A with the CFTC on an annual basis. Mid-size CPOs (AUM of at least $150 million but less than $1.5 billion) are required to file CFTC Form CPO-PQR Schedules A and B on an annual basis. CPOs with AUM greater than $1.5 billion are required to file CFTC Form CPO-PQR Schedules A, B and C on a quarterly basis. Finally, CPOs that file Form PF with the SEC are only required to file CFTC Form CPO-PQR Schedule A on an annual basis. Click here to view a sample copy of the CFTC Form PQR.
CFTC Regulation 4.27 also requires CTAs to make an annual filing with the CFTC within 45 days of the year end on the CFTC Form PR. Click here to view a sample copy of the CFTC Form PR.
NFA Requirements under NFA Rule 2-46
Although CFTC Regulation 4.27 bases its filing frequency and content on a CPOs AUM, NFA has determined that it will continue to require all CPOs to report quarterly under NFA Compliance Rule 2-46 as these filings provide NFA with valuable information used in carrying out its oversight responsibilities. However, in order to streamline the process in light of the CFTC's requirements, NFA has modified its filing requirements as follows:
Large CPOs are required to file a CFTC Form CPO-PQR (Schedules A, B and C) on a quarterly basis with the CFTC within 60 days of the quarter end and that filing will satisfy their NFA filing requirement.
Mid-size CPOs do not have a CFTC quarterly filing requirement but they will continue to be required to file NFA's Form PQR for the quarters ended March, June and September, within 60 days of the quarter end. Mid-size CPOs will satisfy the December 31 NFA quarterly filing requirement by filing CFTC Form PQR (Schedules A and B) within 90 days of the close of each calendar year end.
Small CPOs do not have a CFTC quarterly filing requirement but they will continue to be required to file NFA's Form PQR for the quarters ended March, June and September within 60 days of the quarter end. Small CPOs will satisfy the December 31 NFA quarterly requirement by filing CFTC Form PQR (Schedule A) plus a Schedule of Investments within 90 days of the close of each calendar year end.
CPOs that file Form PF with the SEC in lieu of CFTC Form PQR will be required to file NFA Form PQR with NFA on a quarterly basis within 60 days of the quarter end, except for the quarter ending December 31, in which the CPO can satisfy NFA's quarterly requirement by filing CFTC Form PQR (Schedule A) plus a Schedule of Investments within 60 or 90 days, depending on the size of the CPO.
The itemization threshold of the Schedule of Investments (Schedule B step 6) has been decreased from 10% to 5%.
Click here to view a sample copy of the NFA Form PQR. All CPO and CTA Members, regardless of whether they are currently active, must submit a filing each quarter. All filings for both the NFA and the CFTC will be submitted through NFA's EasyFile system. For CPOs, the filing consists of both firm and pool level questions. After completing the cover page, the system will determine what forms are required to satisfy a CPO's CFTC and NFA filing requirements for that period. The CPO will be required to complete one set of forms, with the applicable information being forwarded to the CFTC.
Questions regarding these filing requirements should be directed to Tracey Hunt, Associate Director, Compliance (email@example.com or 312-781-1284) or Mary McHenry, Associate Director, Compliance (firstname.lastname@example.org or 312-781-1420).