CFTC Proposes Rules to Require that IBs, CPOs and CTAs Become Members of a Registered Futures Association

The Commodity Futures Trading Commission has proposed rules requiring that all registered introducing brokers (IBs), commodity pool operators (CPOs) and commodity trading advisors (CTAs) become members of at least one registered futures association. The National Futures Association (NFA) is currently the only registered futures association in existence. CFTC Regulation 170.15 requires that all futures commission merchants (FCMs) be members of a registered futures association. NFA Bylaw 1101, in turn, prohibits an NFA member from doing business with a person that is required to be registered with the CFTC as an FCM, IB, CPO or CTA if that person is not also an NFA member. Because not all swaps are required to be cleared through a futures commission merchant, IBs, CPOs and CTAs could do business with customers without having to deal with an NFA member FCM and, in turn, without becoming members of the NFA. The CFTC proposal would eliminate this possibility by requiring that all IBs, CPOs and CTAs become members of a registered futures association.  

The CFTC’s proposing release is available here.

Topics:  CFTC, CPO, CTA, FCMs, Guaranteed Introducing Brokers, NFA, Registration

Published In: Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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