On Jan. 21, NFA issued rule relief for exemptions from registration.
NFA issued Notice I-25-03 on CPO/CTA member registration exemption obligations.
Noted that firms taking reasonable steps would not violate NFA Bylaw 1101, NFA Rule 2-36 re difficulty determining continuing eligibility of exemption from registration.
Follows NFA guidance on CPO/CTA annual affirmation registration exemption, #235486
Registration Exemptions
Any person who claims exemption from CPO registration under CFTC Regulation 4.13, CFTC Regulation 4.5, or CFTC Regulation 4.14 must affirm the exemption annually.
Must affirm the applicable notice of exemption within 60 days of the calendar year end.
Recognized it may be difficult for a member to conclusively determine before annual affirmation if a previously exempt CPO/CTA continues to be eligible for an exemption.
Persons that fail to file the affirmation notice will be deemed to have requested a withdrawal of the exemption and may be required to be registered and NFA Members.
NFA Rule Relief
Members who take reasonable steps to determine the registration and membership status of previously exempt persons will not violate NFA Bylaw 1101, NFA Rule 2-36(d)
Not in violation of rules if, between Jan. 1 and Mar. 31, 2025, they transact customer business with previously exempt person that fails to become registered, NFA member.
Member Obligations
Members should compare list of exempt CPO/CTAs with which member transacts to the information NFA makes available to determining if CPO/CTA has affirmed its exemption
Outlined how to identify whether an exempt CPO/CTA has affirmed its exemption.
Must file a notice affirming its exemption from CPO/CTA registration, or provide written representation on why person not required to register/file notice affirming exemption.
Additionally, the notice also provided NFA expectations for members transacting customer business with an exempt CPO/CTA that has not already affirmed exemption.
Effectiveness
Exempt CPOs/CTAs have until Mar. 3, 2025, to complete the affirmation process.
Regulators
NFA
Entity Types
CPO; CTA
Reference
Nt I-25-03, 1/21/2025; Citation: *NFA* Bylaw 1101, Rule 2-36;
