January 19, 2020

January 17, 2020

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NFA Announces Effective Date for Supervision of Branch Offices and Guaranteed IBs

On October 8, the National Futures Association (NFA) issued Notice I-19-19 announcing the effective date of the updated Interpretive Notice Compliance Rule 2-9: Supervision of Branch Offices and Guaranteed IBs, which establishes minimum requirements that member firms should implement to supervise their branch offices and guaranteed introducing brokers’ (IB) compliance with certain regulatory requirements. The updated Interpretive Notice is effective January 1, 2020, although NFA members may act in reliance on the guidance immediately.

The update reflects advances in electronic trading, communications and other technologies, providing members with increased flexibility while continuing to subject branch offices and guaranteed IBs to robust supervision and regulatory requirements. The updated Interpretive Notice was discussed in greater detail in the May 24 edition of Corporate & Financial Weekly Digest.

Notice I-19-19 is available here.

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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.