On December 1, 2017, the NFA issued a notice reminding its members of the annual affirmation requirement for persons or entities claiming an exemption or exclusion from registration as a CPO or CTA under applicable CFTC regulations.1 On January 9, 2018, the NFA clarified members’ compliance obligations for dealing with unregistered entities.2 The annual affirmation must be completed by March 1, 2018. This client alert summarizes the key points from the NFA’s notices and provides other notable updates for CPOs and CTAs, as well as entities dealing with CPOs and CTAs.
It is that time of year again—time to affirm exemptions and exclusions from registration as a commodity pool operator (CPO) or commodity trading advisor (CTA) for 2018. The Commodity Exchange Act, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act, (CEA) requires CPOs and CTAs to register with the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), unless an exemption or exclusion from registration applies. CFTC regulations also require a person or entity claiming an exemption or exclusion from CPO or CTA registration under CFTC regulation 4.5, 4.13(a)(1), 4.13(a)(2), 4.13(a)(3), 4.13(a)(5), or 4.14(a)(8) to file an annual affirmation of such exemption or exclusion with the NFA. The annual affirmation must be completed within 60 calendar days following the calendar year end (i.e., within 60 calendar days of December 31 of the prior year). Reed Smith discussed this obligation in detail in a previous client alert, which is available here.