July 5, 2020

Volume X, Number 187

July 03, 2020

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NFA Notice to Members Re: FCM, FDM & IB Guaranteed Obligations & Self-Examination Questionaire

NFA Issues Notice to Members on Recent changes to Self-Examination Questionnaire

On June 2, the National Futures Association (NFA) issued Notice I-20-22 identifying recent rule amendments that are now reflected in NFA’s Self-Examination Questionnaire. Among other minor changes, the questionnaire reflects recent amendments to the following:

  • Interpretive Notice 9019 — Compliance Rule 2-9: Supervision of Branch Offices and Guaranteed introducing brokers (IBs) (effective January 1);

  • Compliance Rules 2-29 and 2-36 and related Interpretive Notices regarding communications with the public and promotional material (effective January 1); and

  • Compliance Rules 2-8 and 2-30 and Interpretive Notice 9029 — NFA Compliance Rule 2-10: The Allocation of Bunched Orders for Multiple Accounts (effective March 1).

NFA has also published Self-Examination Questionnaire Revision Notes, a comprehensive document specifying the recent changes to the Questionnaire.

Notice I-20-22 is available here, and the Self-Examination Questionnaire Revision Notes is available here.

NFA Issues Notice to Members Regarding Obligations Guaranteed by FCMs, FDMs and IBs

On June 2, the National Futures Association (NFA) issued Notice I-20-23 to advise member futures commission merchants (FCMs), forex dealers members (FDMs) and introducing brokers (IBs) that the Joint Audit Committee had recently issued Regulatory Alert #20-01 to remind these registrants of the appropriate net capital treatment of guaranteed obligations and liabilities of subsidiaries or affiliates. Pursuant to CFTC Regulation 1.17(f)(4), the full amount of any guaranteed obligation or liability of a subsidiary or affiliate that is not reported through consolidation of the subsidiary or affiliate must be reflected in the computation of adjusted net capital.

Notice I-20-23 is available here.

Regulatory Alert #20-01 is available here.

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 157


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.


Jack West Financial Attorney Katten

Jack West is an associate in the Financial Markets and Funds practice.