Notices to Members

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Notice I-21-28

September 16, 2021

Effective date for amendments to NFA's Interpretive Notice regarding branch office registration requirements

NFA's Interpretive Notice entitled Registration Requirements: Branch Offices requires each commodity pool operator (CPO), commodity trading advisor (CTA), futures commission merchant (FCM), retail foreign exchange dealer (RFED) and introducing broker (IB) Member to list its branch offices, as defined in the Interpretive Notice, on its Form 7-R. In March 2020, due to the COVID-19 pandemic, NFA issued Notice to Members I-20-12, which provided relief from certain branch office requirements for Members that permitted their registered associated persons (AP) to work remotely from locations that had not been listed as branch offices. That relief remains in effect.

Recognizing that Members may permanently adopt hybrid work environments and permit APs to work remotely, NFA recently amended its definition of branch office. The amended definition excludes any remote working location or flexible shared workspace where one or more APs from the same household live or rent/lease, provided:

  • The AP(s) does not hold the location out publicly as the Member's office;
  • The AP(s) does not meet with customers or physically handle customer funds at the location; and
  • Any CFTC or NFA-required records created at the remote location are accessible at the firm's main or applicable branch office(s) as required under CFTC and NFA requirements.

Members may delist locations currently identified as branch offices if they fall outside of the amended definition.

As a reminder, pursuant to NFA Compliance Rules 2-9(a) and 2-36(e)(1), all NFA Members are required to diligently supervise their employees and agents in all aspects of their commodity interest and forex activities. Therefore, Members must ensure that they have implemented an appropriate supervisory framework to adequately supervise APs working remotely.

These amendments will become effective on September 23, 2021, at which time the relief provided in Notice to Members I-20-12 will expire.

NFA's Advisory Committees supported these amendments, which were unanimously approved by the Board.

More information regarding the amendments can be found in NFA's August 23, 2021 submission letter to the CFTC. If you have any questions related to these amendments please contact Valerie O'Malley, Director, Compliance (vomalley@nfa.futures.org or 312-781-1290) or Elizabeth Sheridan, Assistant General Counsel (esheridan@nfa.futures.org or 312-781-1479).

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