Interpretive Notices

9002 - REGISTRATION REQUIREMENTS: BRANCH OFFICES

(Staff, September 6, 1985; revised July 1, 2000; December 9, 2005; September 30, 2010 and September 23, 2021)

INTERPRETIVE NOTICE

Form 7-R, Branch Offices

Each FCM, RFED, IB, CPO and CTA is required to list on Form 7-R each of its branch offices. A branch office is defined as follows:

Any location, other than the main business address at which an FCM, RFED, IB, CPO or CTA employs one or more persons engaged in activities requiring registration as an AP, excluding any location where one or more APs from the same household live or rent/lease provided the location is not held out to the public as an office of the Member; the AP(s) does not meet in-person with customers or physically handle customer funds at the location; and any CFTC or NFA required records created at the non-branch office location are accessible for inspection at the Member firm's main or applicable listed branch office as required under CFTC Regulation 1.31 and NFA Compliance Rule 2-10.

If the firm has one or more branch offices, NFA's registration records on the firm must include the names of all persons who are branch office managers. Each location must have a branch office manager, and that person's status as a branch office manager should be listed in the Registration Categories section of the person's Form 8-R even if previously listed as a principal in the Registration Categories section of the person's Form 8-R. Each branch office must have a different manager.

Effective July 1, 2026, the paragraphs above will read as follows:

If the firm has one or more branch offices, NFA's registration records on the firm must include the names of all persons who are branch office managers. Each location must have a branch office manager, and that person's status as a branch office manager should be listed in the Registration Categories section of the person's Form 8-R even if previously listed as a principal in the Registration Categories section of the person's Form 8-R. Each branch office must have a different manager, unless the Member has determined that based on the size, scope and operations of certain branch offices, the person designated as the branch officer manager can effectively and diligently supervise more than one branch office location. The Member's supervisory procedures should be reasonably designed to ensure the branch office manager(s) can effectively supervise its APs' activities at each of the branch office(s). Further, the person(s) designated as a branch officer manager(s) may supervise remotely, on a full or part-time basis, provided the Member has developed and implemented appropriate supervisory procedures tailored to a remote supervisory work arrangement.

If the Member becomes aware of any indicia of irregularities or misconduct involving a branch office, including but not limited to: disciplinary actions, trends in customer complaints that upon inquiry appear bona fide, significant operational issues or irregularities or misconduct identified through routine surveillance or supervision, the Member should reassess whether the person designated as the branch officer manager is able to effectively supervise more than one branch office location and/or is able to effectively supervise remotely.

The address must also be given for each branch office. A P.O. Box is not sufficient. Anyone with a status as branch office manager must also be currently registered as an AP or have applied for such registration. Whenever a new branch office is established it must be reported, with all the required information, to NFA by filing an update electronically to the firm's Form 7-R. The closing of an existing branch office should also be reported by filing an update electronically to the firm's Form 7-R.

NFA may take disciplinary action against any Member which fails to properly list all of its offices.

An important point to recognize is that a branch office may not itself be a separate corporation or partnership. CFTC Regulation 166.4 requires each branch office to use the name of the firm of which it is a branch for all purposes and to hold itself out to the public under such name. Also, in CFTC Interpretive Letter No. 84-10 (May 29, 1984) it was concluded that a branch office could not maintain a separate identity from the Member. One obvious conclusion to be drawn from this information is that each AP in a branch office must be paid directly by the Member. Payment through any intermediary would lead to the assumption that the intermediary would be required to register as an IB.

The requirement that a branch office hold itself out to the public under the name of the Member is intended to ensure that customers are always aware of the Member with which they are doing business. It is necessary that any branch office AP, even one operating out of a residence or an unrelated place of business, make sure that customers understand who they are doing business with.