September 24, 2018

September 24, 2018

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NFA Issues Notice of Additional Reporting Requirements for CPOs and CTAs That Trade Virtual Currency Products and IBs that Solicit or Accept Orders in Virtual Currency Products

On December 14, 2017, the National Futures Association (NFA) issued Notices regarding commodity pool operators (CPOs), commodity trading advisors (CTAs) and introducing brokers (IBs), outlining new reporting requirements for CPOs, CTAs and IBs that deal in virtual currencies.

Effective December 14, 2017, any CPO or CTA must notify the NFA by amending the firm-level section of its annual questionnaire, after it executes its first transaction involving any virtual currency or virtual currency derivatives contract on behalf of a pool or managed account. Beginning the first quarter of 2018, within 15 days of the end of a quarter, CPOs and CTAs must report the number of their pools or managed accounts that executed transactions involving a virtual currency or virtual currency derivatives contract during such quarter. This report should be made through the firm’s questionnaire. (Notice I-17-28)

Effective December 14, 2017, any IB must notify the NFA, by amending the firm-level section of its annual questionnaire, after it first solicits or accepts any orders in a virtual currency derivatives contract. Beginning the first quarter of 2018, within 15 days of the end of the quarter, IBs must report the number of accounts they introduced that executed trades in a virtual currency derivatives contract during such quarter. (Notice I-17-29)

NFA’s Notice I-17-28 is available here.

NFA’s Notice I-17-29 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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312-902-5372
Timothy Nolan, Katten Law Firm, Chicago, Corporate Law Attorney
Associate

Timothy Nolan concentrates his practice on transactional, corporate and regulatory aspects of financial services matters. Timothy is able to provide legal services to a wide variety of clients, including proprietary trading firms, hedge funds, broker-dealers, registered investment advisers, commodity trading advisers, financial institutions and general corporate clients.

Prior to joining Katten, Timothy served as the CEO and the president of the board of directors of a small commercial real estate company and spent 10 years in the scrap recycling industry, including several years as general manager of a mid-sized company. In his time in the scrap recycling industry, Timothy worked with traders, brokers, importers and exporters, and other industry professionals around the world relating to ferrous, non-ferrous and precious metal recycling, together with paper and plastic recycling.

312-902-5447