Alert December 10, 2013

NFA Issues Guidance on Annual Affirmation Requirement for Entities Operating Under An Exemption or Exclusion from CPO or CTA Registration

The National Futures Association (the “NFA”) has issued guidance reminding market participants of CFTC regulations that require any person claiming an exemption or exclusion under CFTC Regulation 4.5, 4.13(a)(1), 4.13 (a)(2), 4.13 (a)(3), 4.13 (a)(5) or 4.13 (a)(8) from the requirement to register as a commodity pool operator (“CPO”) or commodity trading advisor (“CTA”) to annually affirm their notice of exemption or exclusion within 60 days of calendar year end, which is March 3, 2014 for the current affirmation cycle.  The guidance states that failure to affirm such exemption or exclusion by March 3, 2014 will result in the automatic withdrawal of such exemption or exclusion on that date, thereby subjecting the person to the regulations applicable to CPOs or CTAs and to possible CFTC enforcement action for non-compliance.

The guidance explains the procedures for affirming notices of exemptions or exclusions and contains a list of frequently asked questions and answers.  The guidance also explains how an NFA member can fulfill its NFA Bylaw 1101 obligation to confirm that another party has affirmed its exemption.