NFA updates branch registration requirements

NFA updates branch registration requirements

NFA has finalized its updated Interpretive Notice 9002 to registration requirements of branch offices.

At the beginning of the COVID-19 outbreak between Q2 and Q3 of 2020, NFA offered relief from registration requirements for associated persons (APs) working out of remote locations due to the global pandemic crisis. As NFA’s previous criteria for registering a branch office was simply an AP soliciting NFA business out of any location outside the main office, the relief provided in the time of COVID-19 was surely appreciated by all firms going fully remote for the sake of their employees’ health and safety.

The updated Interpretive Notice 9002 was finalized on September 23, 2021. In it, NFA has defined a branch office as any address other than the NFA member firm’s main address at which the respective firm employs one of more persons doing NFA, AP business – excluding any location where:

  1. One or more APs from the same household live or rent/lease
  2. The location is not held out to the public as an office of the Member
  3. The AP(s) does not meet in-person with customers
  4. The AP(s) does not physically handle customer funds at the location, and
  5. Any CFTC or NFA required records created at the non-branch office location are accessible for inspection at the Member firm’s main or applicable listed branch office (as required under CFTC Regulation 1.31 and NFA Compliance Rule 2-10).

Additional notes from this Interpretive Notice detail that a branch office may not itself be a separate corporation or partnership and that each AP in a branch office must be paid directly by the NFA member firm.

This new guidance is already in effect and overrides previous NFA requirements of branch offices if they contradict with the above.

We can help

At Bovill, our NFA experts can help decipher whether locations from which a firm’s employees are working qualify as a branch office and thereafter, if necessary, help the firm register new branch offices with NFA.