Notices to Members

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Notice I-19-14

June 12, 2019

Effective date for amendments to incorporate swaps supervision requirements and make technical changes to certain NFA Rules and Interpretive Notices

NFA recently amended several Compliance Rules and Interpretive Notices to expressly incorporate supervision requirements for Members' swaps activities. As amended, NFA Compliance Rule 2-9(a) will specifically apply to the commodity interest activities of futures commission merchant (FCM), introducing broker (IB), commodity pool operator (CPO) and commodity trading advisor (CTA) Members, thereby covering the swaps activities of those Member categories. In addition, NFA adopted Compliance Rule 2-9(d), requiring swap dealer (SD) Members to diligently supervise the swaps activities of their employees and agents. NFA also amended several related Interpretive Notices primarily to identify the supervisory obligations that apply to specific Member categories and made a number of non-substantive technical amendments.

NFA also adopted a new Interpretive Notice titled NFA Compliance Rule 2-9(d): Supervision Requirements for Swap Dealer and Major Swap Participant Members. This Interpretive Notice clarifies that, similar to the CFTC, NFA retains examination and enforcement authority over SD Members relying on substituted compliance. In addition, under appropriate facts and circumstances, NFA may find that an SD Member relying on substituted compliance has violated the supervision requirement set forth in NFA Compliance Rule 2-9.

The amendments and new Interpretive Notice described above will become effective on September 30, 2019. More information on these amendments is available in the March 8, 2019 submission letter to the CFTC. If you have any questions regarding these amendments, please contact Joe Zangri, Managing Director, OTC Derivatives (212-346-5632 or or Sarah Iverson, Director, Compliance (312-781-1202 or ).

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