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NFA Announces the Effective Date of Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities

On August 9, the National Futures Association (NFA) announced the effective date of its recently adopted Interpretive Notice, Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities. The Interpretative Notice will go into effect on October 31 (“Effective Date”).

The Interpretive Notice establishes disclosure requirements for futures commission merchants (FCMs), investment banks (IBs), commodity pool operator (CPOs) and commodity trading advisor (CTAs) that engage in activities related to virtual currencies or virtual currency derivatives. Beginning on the Effective Date, FCM and IBs that are NFA members must provide virtual currency derivative customers with certain NFA and Commodity Futures Trading Commission advisories at or before the time they trade a virtual currency derivative and must provide the advisories to customers that traded virtual currency derivatives prior to the Effective Date by November 30. There is also standardized disclosure that must be provided in relation to spot trades. The Interpretive Notice also requires CPO and CTAs that are NFA members to review and make any necessary updates to disclosure or offering documents for pools, exempt pools, or managed account programs that trade virtual currencies or virtual currency derivatives by November 21.

The NFA’s announcement is available here.

The Corporate & Financial Weekly Digest previously covered the NFA’s submission of the Interpretive Notice to the CFTC for approval here.

In addition, more details relating to the interpretive notice are available in Gary DeWaal’s July 27, 2018 Between Bridges issue of Bridging the Week.

©2019 Katten Muchin Rosenman LLP


About this Author

Sarah Adams, New York Financial Services Attorney, Katten Law Firm

Sarah R. Adams concentrates her practice in financial services matters.

While in law school, Sarah was on the staff of the Georgetown Immigration Law Journal. She received her JD from the Georgetown University Law Center and her BA from Johns Hopkins University, with honors. Sarah is admitted to the bar in New York.

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.

Kevin has served as counsel to the Futures Industry Association (FIA) for more than 20 years. In 2012 he was recognized for his exemplary efforts on behalf of the association and the industry, in particular for his guidance in navigating the challenges confronting FIA member firms in complying with the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Gary DeWaal, Securities Attorney, Katten Law Firm, New York
Special Counsel

Gary DeWaal focuses his practice on financial services regulatory matters. He counsels clients on the application of evolving regulatory requirements to existing businesses and structuring more effective compliance programs, as well as assists in defending and resolving regulatory disciplinary actions and enforcement matters. Gary also advises buy-side and sell-side clients, as well as trading facilities and clearing houses, on the developing laws and regulations related to cryptocurrencies and digital tokens.

Previously, Gary was a senior...