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NFA Publishes Information For CTAs Using Third-Party Recordkeeping

On June 30, the National Futures Association (NFA) published Notice to Members I-17-11, establishing an electronic process for a registered commodity trading advisor (CTA) to notify the NFA where the CTA uses a third-party recordkeeper. This notice is effected through the NFA’s electronic Exemptions System by claiming a “4.7(c)(2)” or “4.33” exemption, as applicable, and identifying the relevant third-party recordkeeper(s) used by the CTA.

The Commodity Futures Trading Commission Division of Swap Dealer and Intermediary Oversight (DSIO) previously provided relief to registered CTAs from the CFTC regulations, requiring books and records to be kept at the CTA’s main business office. As provided in the CFTC Exemptive Letter No. 17-24, a CTA may use a third-party recordkeeper as long as the CTA files a notice of claim with the DSIO containing the representations set forth in the exemptive letter.

The NFA is now requiring notice of the third-party recordkeeping through the NFA’s Exemptions System. Detailed instructions for the Exemptions System are available in Notice I-17-11.

©2019 Katten Muchin Rosenman LLP


About this Author

Christian B. Hennion, Finance Attorney, Katten Muchin Law Firm

Christian B. Hennion concentrates his practice in financial services and asset management matters, including counseling fund managers, registered investment advisers and commodity trading advisors on both transactional and regulatory matters. Chris has advised a wide range of US and international managers, from start-ups to large institutions, regarding a variety of matters, including private fund launches and reorganizations, advisory engagements, Investment Advisers Act and Commodity Exchange Act compliance obligations, Securities and Exchange Commission (SEC) and Commodity Futures...

Laura Krcmaric, Financial Services Attorney, Katten Law Firm

Laura Krcmaric represents clients in the financial services industry, focusing on regulatory and compliance work. Prior to joining Katten, Laura served as counsel for Credit Suisse, where she provided advice to the private banking and wealth management division. She also was an honors intern with the Securities and Exchange Commission.

While in law school, Laura served as a staff member and symposium editor for the North Carolina Law Review. She also was a member of the Community Development Law Clinic, representing nonprofit organizations.