Proposed Rule

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Explanation Proposed Amendments

When NFA implemented the Online Registration System ("ORS") last year, certain Bylaws relating to applications for NFA membership were amended. Since then, staff has performed a more comprehensive review of the Bylaws, particularly those relating to withdrawing from NFA membership. Based on this review, the Board approved technical amendments to NFA Bylaws 301 and 1303 primarily to conform the Bylaws to current practices and to further implement ORS.

Bylaw 301(g) was amended to clarify that the notice of a right to appeal an adverse decision to the Commodity Futures Trading Commission shall be included in the written decision.

The amendments to Bylaw 301(h) change the introductory provisions of Bylaw 301(h) to include references to withdrawal as a Member or Associate to make NFA Bylaws and Registration Rules consistent. The amendments also add references to violations of the specific NFA requirements that a Member or Associate remains liable for after withdrawal or termination. The changes to subsections (ii) and (vii) conform the Bylaw to existing practice.

The amendments to subsections (iii) and (iv) reflect the longstanding practice that requires firms to file a Form 8-T to notify NFA of the termination of an employee and a Form 7-R to request withdrawal of NFA membership. The amendments specify that these filings must be made using ORS unless otherwise provided. Additionally, the change to subsection (iii) eliminates the automatic reinstatement of Associate registration provisions, also to conform to longstanding practice. The amendments to subsection (iv) add the requirement that Form 7-W must be used to request withdrawal of an application for NFA membership and specify the bases upon which NFA may refuse to permit a firm to withdraw from membership, which parallels the provisions for refusal to permit withdrawal of registration under NFA Registration Rule 601(c). In addition, the term "resign" is replaced with "withdraw" to provide internal consistency in the Bylaws and Registration Rules. The amendments to subsections (vi) and (vii) simply change the titles of these subsections.

Bylaws 301(i) and (j) were amended to clarify that the street address on file at NFA is the address to which all written notices will be sent. Proposed Bylaw 301(j) is new and reflects the process by which all notices are issued in ORS. Bylaw 1303 was also amended to reflect the process by which notices are issued in ORS.

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