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Housekeeping

Housekeeping, Reminders & Updates February 2017

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NATIONAL FUTURES ASSOCIATION December 31, 2016 NFA Form PQR The National Futures Association (“NFA”) emailed a reminder to commodity pool operators (“CPOs”) regarding quarterly reports and possible late fees. The 2016 fourth quarter CPO quarterly report (“Form PQR”) is due in March. CPOs that have more than $1.5 billion in assets under management (“AUM”) are required to file Form PQR no later than Wednesday, March 1, 2017. The due date for CPOs with less than $1.5 billion in AUM is March 31, 2017. In order to avoid a later fee, CPOs must file the 2016 fourth quarter Form PQR by the applicable due date based on AUM.  CPOs with less than $1.5 billion in AUM must update Box 0155 on the Form PQR cover page and save the filing.  This action will amend the due date from March 1st to March 31st.  Failure to file Form PQR or update Box 0155 will result in an assessment of a $200 late fee for each business day the Form PQR is past due. Please refer to NFA Compliance Rule 2-46 or Notice I-16-16 for additional information regarding the late fee and filing requirements. Anti-Money Laundering Programs In response to the Financial Crimes Enforcement Network (“FinCEN”) January 19th Advisory, which was covered in the January Housekeeping, Reminders and Updates of the NIBA Journal, the NFA published Notice I-17-04.  The purpose of the notice was to urge futures commission merchants (“FCMs”) and introducing brokers (“IBs”) to familiarize themselves with the FinCEN Advisory so that they can conduct a thorough review of the anti-money laundering (“AML”) programs.  The review should be conducted to ensure that AML programs are up-to-date and include the most current information regarding the jurisdictions with AML deficiencies. As per NFA Compliance Rule 2-9, FCMs and IBs must maintain an AML program that complies with applicable rules and regulations. In-Office Registration Kiosks to Close On January 30th, the NFA announced that it will close the in-office registration kiosks on May 1, 2017. The NFA has provided registration kiosks, at their Chicago location, for individuals to file and update registrations via the online registration system (“ORS”).  The NFA has experienced a sharp decline in the use of the kiosks.  As a result, the registration kiosks will no longer be available effective May 1st. NFA Notice I-17-05 provides additional information regarding registration assistance and services that will continue to be provided at the Chicago location. Board of Directors and Committees The NFA announced the results of the Board of Directors, Nominating Committee and Executive Committee elections.  Information regarding the Board of Directors and Committees are available on Notice I-17-06 and Notice I-17-07. Swap Dealer and Major Swap Reporting Requirements On February 21, 2017, the NFA submitted a letter to the Commodity Futures Trading Commission proposing the adoption of NFA Financial Requirements Rule 17 (the “Rule”.) The proposed Rule, unanimously approved by the NFA Board of Advisors on February 16, 2017, will require all Swap Dealer and Major Swap Participants to submit data relating to financial, operational, risk management, and other information required by NFA. The purpose of the Rule is help the NFA identify firms that may pose a higher risk in order to allocate resources in an efficient manner. The NFA’s Board of Directors is still in the process of determining which data elements they will specifically require Swap Dealer and Major Swap Participants to submit. BUREAU OF ECONOMIC ANALYSIS Form BE-10 Benchmark Survey of U.S. Direct Investment Abroad Last April 2016, The Bureau of Economic Analysis (“BEA”) announced a change to Private Funds Reporting effective beginning with surveys conducted in 2017. This change is an attempt to simplify reporting for those who previously were required to report particular cross-border investments on both the Treasury International Capital surveys of portfolio investments and the BEA direct investment reporting system, as well as cataloging U.S. direct investment data and portfolio investment data with similar financial characteristics. This change in reporting will only apply to certain U.S. entities with investments in Foreign Private Funds that exceed a 10% voting interest and foreign entities with investments in U.S. private funds that exceed a 10% voting interest. Direct investments in operating companies will remain submitted to the BEA.   For further information about any of the topics covered, please feel free to contact Ruddy Gregory, PLLC (www.ruddylaw.com) or 202-797-0762.  

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