Reed Smith Client Alerts

On December 1, 2021, 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 This client alert summarizes the key points from the NFA’s notice.

It is time to affirm exemptions and exclusions from registration as a commodity pool operator (CPO) or commodity trading advisor (CTA) for 2022. The Commodity Exchange Act (CEA), as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act, 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.

Persons re-affirming an exemption under 4.13(a)(1), 4.13(a)(2), 4.13(a)(3) and 4.13(a)(5) will be required to attest that neither the person nor its principals have in their background any statutory disqualifications listed under section 8a(2) of the CEA.

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.