NFA Proposes Amendments to CPO and CTA Quarterly Reporting Requirements
Monday, September 19, 2016

On September 6, the National Futures Association (NFA) filed with the Commodity Futures Trading Commission for approval an amendment to NFA Compliance Rule 2-46 (CPO and CTA Quarterly Reporting Requirements) and a proposed NFA Interpretive Notice NFA Compliance Rule 2-46: Reporting Financial Information on NFA Forms PQR and PR. NFA Compliance Rule 2-46 requires member commodity pool operators (CPOs) and commodity trading advisors (CTAs)(with reporting requirements under CFTC Regulation 4.27) to file NFA Forms PQR and PR, respectively, on a quarterly basis. Such forms collect general identifying information regarding member CPOs/CTAs in addition to specific information on the pools operated by such CPOs and the assets directed by such CTAs.

Under the proposed amendment and Interpretive Notice, member CPOs/CTAs would be required to disclose information relating to two additional ratios on the Form PQR and PR, respectively: (1) the Current Assets/Current Liabilities Ratio, which provides a measure of a firm’s liquidity; and (2) the Total Revenue/Total Expenses Ratio, which measures a firm’s operating margin. If adopted, NFA intends to use the new ratios to collect information about the financial condition of member CPOs/CTAs and identify firms that could be facing financial difficulties.

The proposed amendment is available here.

 

 

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