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March 01, 2019
Regulatory requirements reminder for CPO and CTA Members
NFA is committed to providing its Members with the resources they need to meet their regulatory obligations as efficiently as possible. This Notice serves as a reminder that Members can access information detailing annual and ongoing requirements from the Members section of NFA's website.
Commodity pool operators (CPO)
Commodity trading advisors (CTA)
On a yearly basis, each NFA Member must complete the annual update process on the anniversary of its membership date. This process includes completing the Annual Questionnaire, as well as paying membership dues. If this process is not completed within 30 days of a Member's anniversary of its membership date, NFA will treat this as a request to withdraw the firm from NFA membership and/or CFTC registration. Updating the Annual Questionnaire also ensures that Members receive Notices applicable to their business operations.
Additionally, NFA Members must annually review their operations using NFA's Self-Examination Questionnaire. This questionnaire is designed to aid Members in recognizing potential problem areas and to alert them to procedures that need to be revised or strengthened.
On an ongoing basis, each NFA Member must update its Annual Questionnaire in the event of a material change to its operations. For example, if a Member begins soliciting for virtual currency derivatives or begins doing business, the Member must immediately update its Annual Questionnaire. Doing so ensures that NFA's BASIC system displays correct information about the firm's business activities and ensures the firm receives all applicable notices relating to its reporting requirements in a timely manner.
Each NFA Member must also keep its Form 7-R up-to-date. The Form 7-R includes, among other information, the firm's address, contact information and listed principals and can be accessed using NFA's Online Registration System (ORS).
Additional reminders for CPO and CTA Members
- CPO and CTA Members must compute financial ratios using the accrual method of accounting and in accordance with U.S. generally accepted accounting principles or another internationally recognized accounting standard as outlined in Interpretive Notice 9071. Members should consult Notice I-18-20 for additional guidance on calculating these ratios.
- Prior to entering into an agreement with a pool participant or managed client, CPO and CTA Members must provide the individual with a disclosure document that is current within the preceding 12 months and has been filed and accepted by NFA. Only CPO and CTA Members who hold the required exemption with NFA are exempt from providing a disclosure document.
- CPOs and CTAs engaging in virtual currency activities must provide disclosures to pool participants and managed account clients as outlined in Interpretive Notice 9073.
- Only firms whose regulated activity is limited to swaps may claim to be Swaps Exclusive on the Form 7-R. Otherwise, the firm's APs must pass the Series 3 exam.
- Failure to pay late fees within 30 days of the due date will result in the withdrawal of the firm's registration and/or membership.
If you need assistance with any NFA requirements, please contact NFA's Information Center (312-781-1410 or 800-621-3570 or email@example.com).