Insights & Resources

NFA Proposes New Reporting Requirements for Commodity Pool Operators

NFA Proposes New Reporting Requirements for Commodity Pool Operators

Pursuant to Section 17(j) of the Commodity Exchange Act (“CEA”), as amended, NFA has submitted to the Commodity Futures Trading Commission (“CFTC”) the proposed adoption of NFA Compliance Rule 2-50 and the related Interpretive Notice entitled NFA Compliance Rule 2-50: CPO Notice Filing Requirements.

The rule would require each CPO Member to provide prompt notification, in the form and manner prescribed by NFA no later than 5 p.m. (CT) of the next business day upon the occurrence of one of the following events, in accordance with the related Interpretive Notice entitled CPO Notice Filing Requirements:

  • CPO Member operates a commodity pool that is unable to meet a margin call(s);
  • CPO Member operates a commodity pool that is unable to satisfy redemption requests in accordance with its subscription agreements;
  • CPO Member operates a commodity pool that has halted redemptions and the halt on redemptions is not associated with pre-existing gates or lockups, or a preplanned cessation of operations; or
  • CPO Member receives notice from a swap counterparty that a pool the CPO Member operates is in default.

NFA is invoking the “ten-day” provision of Section 17(j) of the CEA and plans to make NFA Compliance Rule 2-50 and the proposed Interpretive Notice effective as early as 10 days after receipt of this submission by the CFTC, unless the CFTC notifies NFA that the CFTC has determined to review the proposal for approval.

To read the full proposal, click here [PDF]

Photo by Pedro Lastra on Unsplash

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