January 19, 2022

Volume XII, Number 19


January 18, 2022

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National Futures Association "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.

©2022 Katten Muchin Rosenman LLPNational Law Review, Volume III, Number 33

About this Author

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.