NFA Issues Guidance on Financial Reporting Requirements


[authors: Kenneth M. Rosenzweig, Kevin M. Foley and Blake J. Brockway]

On October 1, the National Futures Association (NFA) provided additional guidance on how to fulfill its recently adopted financial reporting obligations. NFA Financial Requirements Section 16, which became effective on September 1, requires futures commission merchants (FCMs) to submit certain financial related information to NFA on a monthly, semi-monthly or daily basis. While NFA will obtain most of the required information from other regular filings, FCMs holding customer segregated and secured amount funds must report information that is not already included in the firms’ monthly or semi-monthly filings. Beginning with the report for the month ending September 30, affected FCMs will provide the additional information in either the “Supplementary Information” section of the Form 1-FR or the “Exchange Supplementary” section of the Form 1-FR or FOCUS Report. The NFA notice includes specific instruction on how to report information regarding the FCM’s use of leverage, depositories used to hold customer segregated and secured amount funds, and the residual interest target amounts for those funds.

More information 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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