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July 23, 2012
National Futures Association launches education initiative in wake of CFTC rule amendments rescinding exemptions from registration for commodity pool operators and commodity trading advisors
July 23, Chicago – National Futures Association (NFA) today announced an education initiative to assist commodity pool operators and commodity trading advisors that will be affected by the Commodity Futures Trading Commission's (CFTC) recent rule amendments rescinding exemptions from registration. The initiative will include published guidance, webinars, workshops and tutorial videos.
On February 24, 2012, the CFTC issued final rules amending CFTC Part 4 Regulations to rescind the exemption from registration available to CPOs offering certain qualifying pools under CFTC Regulation 4.13(a)(4). CPOs who previously qualified for this exemption have until December 31, 2012 to register.
"The rescission of these exemptions will result in a large number of entities being required to register with the CFTC and to become NFA Members," said Sr. Vice President of Compliance Regina Thoele. "We want to ensure that these entities understand the registration process as well as their new ongoing regulatory obligations."
In late June, NFA issued three Notices to Members regarding the effect of the CFTC's new regulations on various categories of NFA membership. Notice I-12-09, dated June 22, provides guidance to current CPO and CTA Members that operate or advise pools pursuant to an exemption under CFTC Regulation 4.13(a)(4).
"Some of our existing CPO Members currently operate pools under the 4.13(a)(4) exemption," explained Thoele. "This Notice describes what other exemptive relief may be available to them and outlines the additional regulatory requirements they will be subject to once the 4.13(a)(4) exemption expires."
Notice I-12-10, dated June 25, outlines the responsibilities of Members carrying accounts for or transacting business with persons exempt from registration.
"NFA Bylaw 1101 states that NFA Member firms can not conduct futures-related business with a non- Member firm that is required to be registered," said Thoele. "With the elimination of these exemptions, NFA Member firms such as futures commission merchants and introducing brokers will have the responsibility to ensure that these previously unregistered CPOs are registered and NFA Members on December 31, 2012, in order to continue doing business with them."
Notice I-12-12, dated June 26, provides guidance to persons operating or advising funds pursuant to an exemption under CFTC Regulation 4.13(a)(4).
"Our research indicates that there are hundreds of entities that currently operate commodity pools under the 4.13(a)(4) exemption," said Thoele. "The Notice states that any entity that intends to continue trading commodity interests for its pool(s) after December 31, 2012, and does not qualify for any other existing exemption must register as a CPO."
NFA currently has a variety of educational resources on its website, including webinars, tutorials and videos, regarding CPO registration and compliance issues. In the third and fourth quarters of 2012, NFA will conduct workshops throughout the U.S. and in London to assist new CPO/CTA registrants in understanding the registration process and fulfilling their new regulatory requirements. Details regarding these workshops will be announced at a later date.
For additional information, contact NFA's Information Center at (312) 781-1410 or (800) 621-3570 Monday through Friday from 8:00 am to 5:00 pm CST.