October 9, 2015

October 09, 2015

October 08, 2015

October 07, 2015

National Futures Association "NFA" Issues Guidance on Bylaw 1101 Compliance for Pending Introducing Brokers

On December 27, National Futures Association issued guidance for NFA members carrying accounts, accepting orders or handling transactions from an introducing broker (IB) whose NFA membership is pending in reliance upon no-action relief granted by the Commodity Futures Trading Commission. On October 11, CFTC staff granted no-action relief for market participants that become obligated to register as IBs solely based on their activity in IntercontinentalExchange and New York Mercantile Exchange products that are in the process of transitioning from swaps to futures and options contracts. To be eligible for the CFTC staff’s no-action relief, the market participant must have completed and filed a registration application with NFA on or before December 31.

Pursuant to NFA’s guidance, a member carrying an account, accepting an order or handling a transaction from these pending IB members will be considered in compliance with NFA Bylaw 1101 if the member obtains a written representation from the pending IB indicating that it meets the conditions set forth in the applicable CFTC no-action letter. The NFA member’s relief from Bylaw 1101 requirements will expire on the date that the IB becomes an approved NFA member or five days after the pending IB member receives notice that it may be disqualified from registration under the Commodity Exchange Act.

NFA Notice I-12-37 is available here.

©2015 Katten Muchin Rosenman LLP


About this Author

Kenneth M. Rosenzweig, Katten Muchin Law Firm, Financial services matters

Kenneth M. Rosenzweig focuses his practice on financial services matters, with an emphasis on the trading and clearing of financial instruments. Ken represents derivatives clearing organizations, designated contract markets and swap execution facilities, in addition to futures commission merchants, banks and other commercial participants in the exchange-traded and over-the-counter derivatives markets.

Formerly Assistant Chief Counsel and Associate Director in the Division of Trading and Markets of the Commodity Futures Trading Commission (CFTC)...

James M. Brady, Katten Muchin Law Firm, Finance Attorney

James Brady concentrates his practice in financial services matters.

While in law school, James was an editor of the Michigan Journal of International Law. He also served as a judicial intern to the Honorable Stephen J. Markman of the Michigan Supreme Court. http://www.kattenlaw.com/James-Brady