NFA Adopts Requirements for FCMs, IBs, CPOs and CTAs Dealing in Swaps


[authors: Fred M. Santo, Marilyn Selby Okoshi, and Christian B. Hennion]

On October 3, the National Futures Association (NFA) announced that recent amendments to NFA Bylaw 301, relating to approval requirements for “swaps firms” and “swaps APs,” will take effect on January 1, 2013. Under the amended bylaw, any NFA member that is registered with the Commodity Futures Trading Commission as a futures commission merchant (FCM), introducing broker (IB), commodity pool operator (CPO) or commodity trading advisor (CTA) and that engages in swap activities that are subject to the jurisdiction of the CFTC must be identified as a “swaps firm” on the firm’s Form 7-R on the NFA’s Online Registration System. In addition, any associated person (AP) of a swaps firm that engages in swap activities on behalf of the firm in one of the above capacities must be identified as a swaps AP on the Form 8-R for that AP. An existing registrant wishing to be a "swaps firm" must amend its Form 7-R and the Form 8-R only for each AP that will be a swaps AP. A new registrant must respond to the relevant questions for each of its APs. An AP designated as a swaps AP has no additional proficiency examination requirement. (NFA has also provided relief from the examination requirement for certain other APs as summarized below in “NFA Provides Relief from Proficiency Exam Requirements for Certain CPOs, CTAs and Other Swaps Firms”.) An NFA member that is designated as a swaps firm must have at least one principal registered as a swaps AP at all times. Although the amendments do not take effect until January 1, 2013, members and APs may request swap designation effective immediately.

NFA’s Notice to Members I-12-24, which provides additional information about the amendments, is available here.


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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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