Search NFA Rulebook
Search This Rule
Saturday, January 1, 2022 - Amended Bylaw 1301 - Schedule of Dues and Assessments. An explanation of the amended bylaw can be found in the May 24, 2021 rule submission letter.
Saturday, January 1, 2022 - Amended Compliance Rule 2-7 - Branch Office Managers and Designated Security Futures Principals. An explanation of the amended rule can be found in the November 22, 2021 rule submission letter.
9002 - REGISTRATION REQUIREMENTS; BRANCH OFFICES
(Staff, September 6, 1985; revised July 1, 2000; December 9, 2005; September 30, 2010 and September 23, 2021)
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.
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.