January 29, 2023

Volume XIII, Number 29


January 27, 2023

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Exemption from NFA Assessment Fee for Proprietary Trading Firms that Register as Commodity Pool Operators CPOs

The National Futures Association (NFA) has issued a notice temporarily exempting certain proprietary trading firms that may be required to be registered as commodity pool operators (CPOs) as of December 31, 2012, from the assessment fees that CPOs are otherwise required to pay. NFA Bylaw 1301 generally exempts exchange members from paying assessment fees with respect to transactions effected on that exchange. However, the exemption does not apply to exchange members that are commodity pools operated by CPOs.

Because the Commodity Futures Trading Commission has rescinded exemptions from CPO registration effective December 31, 2012, the CFTC could view certain proprietary trading firms as commodity pools subject to CPO registration. NFA’s Board of Directors will consider the application of the NFA assessment fee to such firms. Until the Board of Directors resolves the issue, any proprietary trading firm that becomes registered as a CPO will remain exempt from the assessment fee if its trading account was exempt from the NFA assessment fee as of December 31, 2012, until further notice from NFA.

NFA Notice I-12-33 is available here.

©2023 Katten Muchin Rosenman LLPNational Law Review, Volume II, Number 362

About this Author

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

Kevin M. Foley, Finance Lawyer, Katten Llaw Firm

Kevin M. Foley has extensive experience in commodities law and advises a wide range of clients, both in the United States and abroad, on compliance with the Commodity Exchange Act and the rules of the Commodity Futures Trading Commission (CFTC) affecting traditional exchange-traded products, as well as the over-the-counter markets involving swaps and other derivative instruments. His clients include futures commission merchants, derivatives clearing organizations, designated contract markets, foreign boards of trade and an industry trade association.