NFA Sets Implementation Deadline for Phase 1 of Customer Segregated Funds Reporting

The National Futures Association (NFA) recently amended Section 4 of its Financial Requirements to require futures commission merchants (FCMs) that hold customer funds to in turn require banks and trust companies holding such funds to report on a daily basis the balances of the accounts with such funds to a third party designated by the NFA. The NFA, in conjunction with CME Group, Inc., which imposes similar requirements on its FCM clearing members, has engaged AlphaMetrix360, LLC to be the third-party aggregator of the account balance information pertaining to customer funds. In a Notice to Members (Notice), the NFA stated that it will implement this reporting process in phases, beginning with the first phase, requiring banks and trust company depositories to report end-of-day cash and securities balances beginning February 15. The NFA indicated that it will continue to expand the reporting requirements to other institutions holding customer segregated funds, including derivatives clearing organizations and clearing FCMs, over the next several months.

More information on the Notice can be found 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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