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ARTICLE · 19 SEPTEMBER 2016

NFA Proposal Would Require CFTC-Registered Asset Managers To Report On Financial Condition

Morgan Lewis
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The National Futures Association's latest proposal would require registered commodity pool operators and commodity trading advisors to provide new information about their financial condition...

United StatesFinance and Banking
Joshua Sterling
Joshua Sterling
Michael Philipp
Michael Philipp
Sarah V. Riddell
Sarah V. Riddell

The National Futures Association's (NFA's) latest proposal would require registered commodity pool operators and commodity trading advisors to provide new information about their financial condition in quarterly reports to NFA; while the information is limited in scope, it could trigger enhanced scrutiny of a firm's financial condition by regulators and serve as a basis for examination.

NFA's New Customer Protection Efforts

NFA recently proposed enhanced financial reporting obligations (2016 Proposal) for commodity pool operators and commodity trading advisors that are registered with the US Commodity Futures Trading Commission (CFTC) and are members of NFA (CPO/CTAs).1 The 2016 Proposal appears to follow along the same vein as NFA's concept release on customer protection issues in which NFA requested comment on the imposition of minimum capital requirements on CPO/CTAs, among other regulatory initiatives (Concept Release).2 While the 2016 Proposal is

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