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August 23, 2001
NFA to enable fast and efficient passage for broker-dealers seeking to passport into FCM or IB registration
August 23, Chicago - The Commodity Futures Trading Commission (CFTC) has approved National Futures Association's (NFA) proposed amendments to Registration Rule 204, allowing broker-dealers registered with the Securities Exchange Commission (SEC) to "passport" into registration as FCMs or IBs if they limit their futures-related activities to the sale of security futures products on contract markets or derivative transaction execution facilities.
Qualified broker-dealers will become registered upon filing a one-page Notice Form 7-R, which will be available on NFA's web site (www.nfa.futures.org) beginning on September 17, the day the amendments will take effect. There is no cost associated with filing a Notice Form 7-R.
"These amendments were drafted as part of a concentrated effort by NFA to ensure that securities broker-dealers who wish to trade single stock futures and narrow-based security indices are able to register as efficiently as possible," says Greg Prusik, Vice President of Registration and Compliance.
On August 20, NFA received notice from the CFTC that it had approved NFA's proposed amendments to NFA Bylaws, Compliance Rules, Code of Arbitration, and Interpretive Notices — including proposed new Compliance Rule 2-37 and three proposed new interpretive notices — to comply with provisions of the Commodity Futures Modernization Act of 2000 (CFMA) regarding security futures products. The new rules, which have also been submitted to the SEC, became effective upon CFTC approval. With the approval of these rules, NFA has met the obligations that the regulators required it to meet by August 21, paving the way for the trading of security futures products on a principal-to-principal basis.
NFA is still working with the CFTC, the SEC and other SROs on additional issues that must be resolved before the December 21 date for retail trading of security futures products.
NFA is a congressionally authorized self-regulatory organization for the U.S. futures industry.