July 22, 2019

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NFA Amends Swaps Supervision Requirements and Makes Technical Changes to NFA Rules and Interpretive Notices

On June 12, the National Futures Association (NFA) amended several of its rules and interpretive notices to incorporate expressly supervision requirements for NFA members’ swaps activities. NFA Compliance Rule 2-9(a), as amended, will apply specifically to futures commission merchant (FCM), introducing brokers (IB), commodity pool operator (CPO) and commodity trading advisor (CTA) members. New NFA Compliance Rule 2-9(d) will require swap dealer (SD) members to diligently supervise the swaps activities of their employees and agents. Finally, as part of the overhaul to the supervision requirements, the NFA adopted a new interpretive notice titled, NFA Compliance Rule 2-9(d): Supervision Requirements for Swap Dealer and Major Swap Participant Members.

The amendments and interpretive notice will become effective September 30. A complete copy of the March 8 submission letter detailing the amendments is available here.

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About this Author

Kevin M. Foley, Finance Lawyer, Katten Llaw Firm
Partner

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.

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Associate

Leonard Licht is an associate in the Financial Services practice. He advises a broad range of financial market participants, including investment managers to private funds and investors in private funds. Prior to joining Katten, Lenny practiced as a corporate and securities attorney and has also worked in an analytical capacity with a family office.

While in law school, Lenny was a Heyman scholar and member of the Moot Court Honor Society.

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