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Housekeeping

Housekeeping, Reminders and Updates--November 2016

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COMMODITY FUTURES TRADING COMMISSION Filing Period for CCO Annual Reports Extension The Commodity Futures Trading Commission (“CFTC”) announced the unanimous approval to modify CFTC Regulation 3.3. Until now, Regulation 3.3 mandated electronic filings to be completed no more than sixty (60) days after the registrant’s fiscal year-end. The modification changes registrants’ (futures commission merchants, swap dealers and major swap participants) deadline to file their chief compliance officer (“CCO”) annual reports with the CFTC to ninety (90) days after the registrant’s fiscal year-end. Additionally, the modification allows for the Director of the Division of Swap Dealer and Intermediary Oversight to grant extensions to the deadline. Additional details regarding the modification to Regulation 3.3 are available on the Ruddy Gregory, PLLC (“Ruddy Gregory”) website. The final rule has been published in the Federal Register.   Regulation 4 Amendments to CPO Financial Reporting As a result of a unanimous vote, the CFTC approved amendments affecting commodity pool operators’ (“CPOs”) final reporting obligations under Regulation 4.  The CFTC announced the final rule amendments to its regulations regarding CPO financial reports on November 21, 2016 (Press Release PR7487-16). Notably, Regulation 4.22(d)(2) is amended to allow CPOs to use alternative, generally accepted,  accounting methods in preparing its annual report. This amendment thus enables non-US CPOs to use more regional accounting principles, practices, and standards that it is accustomed to rather than US-specific ones when filing its annual report. Also due to the approved amendment, a CPO which has a first fiscal year consisting no more than four (4) months and having a pool comprised of fewer than fifteen (15) participants whose total contribution does not exceed $3,000,000 is no longer required to provide a “stub period” annual report. However, it is necessary for the CPO to obtain a waiver from all non-insider pool participants concerning their reception of an audited annual report. Additionally, a CPO is no longer required to submit an audited annual report so long as all of the pool’s participants are determined to have an identified close relationship with the pool operator. Additional details regarding Regulation 4 rules amendments are available on the Ruddy Gregory website.   Derivatives Market Participants No-Action Letter Expiration CFTC No-Action Letter 16-32 expired on November 17, 2016. At the request of the CFTC Market Oversight Division, market participants are now required to submit Forms 40/40S and 71 in order to comply with Ownership and Control Final Rule requirements. Additional details regarding No-Action Letter 16-32’s expiration is available on the Ruddy Gregory website.   NATIONAL FUTURES ASSOCIATION National Futures Association Annual Update As a reminder, Members and Registrants of the National Futures Association (“NFA”) have the responsibility of completing certain requirements on an annual basis. The following list is provided as guidance for regulatory requirements that might need to be addressed before year-end. This list does not capture all requirements.
  1. Complete the annual update on the anniversary date of the firm’s registration which includes:
  2. Completing the electronic annual registration update;
  3. Electronically submitting the firm’s annual questionnaire on NFA’s website which includes firm and disaster recovery information as well as a questionnaire for each category of registration; and
  4. Paying your annual registration fees and NFA dues.
  5. NFA Self-Examination Checklist located on NFA’s website at: Self-Examination Questionnaire For FCMs, FDMs, IBs, CPOs and CTAs.
  6. Implement and maintain a written Anti-Money Laundering (“AML”) program.
  7. Review and test your Business Continuity and Disaster Recovery Plan.
  8. Provide ethics training as outlined in your firm’s Policies and Compliance Procedures.
  9. Provide every current customer with your firm’s Privacy Policy.
  10. Annual affirmation of exemptions or file any new exemptions.
NOTE: Failure to satisfy all the requirements in the annual update process within thirty (30) days of the firm’s anniversary date will be deemed a request to withdraw its NFA registration and/or Membership. 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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