Notices to Members

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Notice I-17-28

December 14, 2017

Additional reporting requirements for CPOs and CTAs that trade virtual currency products

A number of CFTC-regulated trading venues have launched or announced plans to offer derivatives on virtual currency products, including bitcoin. Given the volatility in the underlying virtual currency products, NFA is requiring each CPO and CTA to immediately notify NFA if it executes a transaction involving any virtual currency or virtual currency derivative on behalf of a pool or managed account. Until further notice, this obligation will apply on a continuous basis—any CPO or CTA that does not currently trade virtual currencies or related derivatives must notify NFA if it begins trading these products.

Effective immediately, a CPO or CTA that executes a transaction involving a virtual currency or virtual currency derivative must notify NFA by amending the firm-level section of its annual questionnaire, which is accessible by authorized users through the following link: https://www.nfa.futures.org/electronic-filing-systems/annual-questionnaire.html. The following questions have been added to the firm-level section of the questionnaire:

CPO Questions

  • Does your firm operate a pool that has executed a transaction involving a virtual currency (e.g., bitcoin)?
  • Does your firm operate a pool that has executed a transaction involving a virtual currency derivative (e.g., a bitcoin future, option or swap)?

CTA Questions

  • Does your firm offer a trading program for managed account clients (other than a pool you reported under the CPO questions) that has engaged in any transaction involving a virtual currency (e.g., bitcoin)?
  • Does your firm manage an account (other than a pool you reported under the CPO questions) that has executed a transaction involving a virtual currency derivative (e.g., a bitcoin future, option or swap)?

Beginning with the first quarter of 2018, CPOs and CTAs that have executed transactions involving virtual currencies or related derivatives will also be required to report the number of their pools or managed accounts that executed one or more transactions involving a virtual currency as well as the number of their pools or managed accounts that executed one or more transactions involving a virtual currency derivative during each calendar quarter. This information must be submitted to NFA through the firm's questionnaire no later than 15 days after the end of a quarter. NFA will issue a separate notice reminding Members of this obligation.

If you have any questions on these new requirements please contact Christine Roche, Associate Director, Compliance (croche@nfa.futures.org or 312-781-1562) or Mary McHenry, Associate Director, Compliance (mmchenry@nfa.futures.org or 312-781-1420).

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