NFA Issues Guidance on Annual Affirmation Requirement for Entities Operating Under An Exemption or Exclusion from CPO or CTA Registration

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The National Futures Association (the “NFA”) has issued guidance reminding market participants of CFTC regulations that require any person claiming an exemption or exclusion under CFTC Regulation 4.5, 4.13(a)(1), 4.13 (a)(2), 4.13 (a)(3), 4.13 (a)(5) or 4.13 (a)(8) from the requirement to register as a commodity pool operator (“CPO”) or commodity trading advisor (“CTA”) to annually affirm their notice of exemption or exclusion within 60 days of calendar year end, which is March 3, 2014 for the current affirmation cycle.  The guidance states that failure to affirm such exemption or exclusion by March 3, 2014 will result in the automatic withdrawal of such exemption or exclusion on that date, thereby subjecting the person to the regulations applicable to CPOs or CTAs and to possible CFTC enforcement action for non-compliance.

The guidance explains the procedures for affirming notices of exemptions or exclusions and contains a list of frequently asked questions and answers.  The guidance also explains how an NFA member can fulfill its NFA Bylaw 1101 obligation to confirm that another party has affirmed its exemption.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this informational piece (including any attachments) is not intended or written to be used, and may not be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

Topics:  CFTC, CPO, CTA, Exemptions, 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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