NFA Amends Financial Reporting Requirements For SEC-Registered SDs

NFA adopted amendments to financial reporting requirements for a swap dealer ("SDs") that is also a broker-dealer or security-based swap dealer ("SBSD") subject to SEC financial reporting requirements.

As previously covered, the amendments to filing requirements in NFA Section 18(e) ("Financial Requirements") are intended to reflect that certain SDs that are also SEC registrants may rely on SEC Rule 18a-10 ("Alternative compliance mechanism for security-based swap dealers that are registered as swap dealers and have limited security-based swap activities") and not be subject to SEC capital and financial reporting requirements.

The NFA learned that certain SDs "intend to comply with the CFTC's capital, margin, segregation, recordkeeping and reporting requirements in lieu of the equivalent SEC regulations," and will not file the FOCUS (Financial and Operational Combined Uniform Single Report) report with the SEC. Therefore, the NFA will require SBSD that do not