Commodity Firms Need to Complete Annual Regulatory Information
The NFA recently released a regulatory reminder to firms which are registered as commodity pool operators and/or commodity trading advisors. The reminder reminds CPOs and CTAs that there are certain annual regulatory items which a firm must complete in order to remain in good standing with the NFA. I have reprinted these two releases below. As a summary, the reports emphasize:
- Firms must complete an annual update and questionnaire. Firms must pay of yearly dues to the NFA (which can be done online). Firms should also make sure that all employees are appropriately registered as Associated Persons, as necessary.
- Firms should review the NFA Self Exam checklist to ensure compliance.
- Firms should review and test the Disaster Recovery Plan. If necessary, adjustments should be made.
- Firms should review Ethics Training Procedures. If necessary, appropriate ethics training should be provided.
- Firms should file any new exemption notices with the NFA, if necessary.
- Firms should review their Disclosure Document. As a reminder, the Disclosure Document must be no more than 9 months old and reviewed by the NFA. If the CPO or CTA firm also trades in the off-exchange forex markets, the Disclosure Document must incorporate the new forex rules which were adopted on November 30, 2008 (see NFA Compliance Rule 2-41 on post regarding NFA to Begin Regulating Forex).
- (For CTAs) If the firm places bunched orders, the firm must conduct (and document) quarterly analysis of the of order allocation method. The order allocation method must be fair and equitable.
- (For CPOs) Firms must distribute the pool’s Annual Report to investors; Annual Report must also be submitted to the NFA.
Many of the above items can be done online. Many of the above items should be overseen by a hedge fund/ securities attorney or an experienced NFA compliance consultant. Please contact us if you would like more information on our annual NFA compliance packages which can be modified based on your needs. We can also provide compliance support on an hourly basis. Continue reading