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March 13, 2020
Coronavirus Update—NFA Branch Office Requirements
NFA Interpretive Notice 9002 – Registration Requirements; Branch Offices requires a Member firm (other than a swap dealer) to list as a branch office on its Form 7-R any location other than the Member's main business address from which APs are engaged in activities requiring registration. The Interpretive Notice further requires that each branch office location must have a branch office manager, who under Compliance Rule 2-7, must have successfully completed the Branch Manager Examination (Series 30).
Due to the coronavirus (COVID-19), a number of Members are considering implementing contingencies pursuant to their business continuity plans that would permit employees, including registered APs, to temporarily work from the employee's home or other remote locations that have not been listed as a branch office on the Member's Form 7-R. Moreover, particularly in the situations where an AP is working from his or her home, there would be no designated branch manager at that location. Over the last several days, NFA has received a number of inquiries on whether these contingency plans—providing for APs to temporarily work from a location not listed as a branch office, without a branch manager—violate NFA's branch office requirements.
NFA understands that the current situation may necessitate alternative work arrangements. NFA will not pursue a disciplinary action against a Member that permits APs to temporarily work from locations not listed as a branch office and without a branch manager provided that the Member implements alternative supervisory methods to adequately supervise the APs' activities and meet its recordkeeping requirements. Member firms should also ensure that these procedures are documented.
NFA expects that these APs will return to the Member's main office or listed branch office location once a Member firm is no longer operating under contingencies pursuant to its business continuity plan.
If you have any questions on these requirements, please contact Valerie O'Malley, Director, Futures Compliance (312-781-1290 or firstname.lastname@example.org).