NFA amends swaps supervision requirements
11 July 2019
On June 12, 2019, the National Futures Association (NFA) amended several of its Rules and Interpretive Notices to incorporate supervision requirements for NFA members’ swaps activities. The amendments continue the NFA’s efforts to incorporate swaps into its jurisdictional oversight, following the adoption of new swaps associated person (AP) proficiency requirements earlier this year.
NFA Compliance Rule 2-9(a), as amended, will now apply specifically to the commodity interest activities of futures commission merchant (FCM), introducing broker (IB), commodity pool operator (CPO) and commodity trading advisor (CTA) members, thereby covering all swaps activities. Similarly, the addition of NFA Compliance Rule 2-9(d) extends enhanced supervision requirements to swap dealer (SD) and major swap participant (MSP) members over the swaps activities of their employees and agents.
The amendments, together with newly issued Interpretive Notice 9076, will become effective September 30, 2019.
What should you do?
NFA members are advised to review the designation of their firm, as a Swap Firm, and personnel, as Swap APs, to assess applicability to current business practice. Likewise, NFA members may want to consider alternatives, such as reliance on relief from IB or CTA registration under CFTC Letter 12-70.
How we can help
Bovill is deeply experienced in supporting its clients with regulatory change and risk mitigation. As part of our Commodity and Derivatives services, we can help you understand your firm’s regulatory exposure and implement the changes necessary to maintain compliance. We can also carry out a health check to examine whether existing practices are being managed and monitored in a way that safeguards compliance and minimizes risk.
Get in touch to explore how we can work together.