NFA provided guidance on annual affirmation obligations for CPOs and CTAs that are exempt from CFTC registration.
In its Notice, NFA reminded members that the CFTC requires any person who claims (i) an exemption or exclusion from CPO registration under CFTC Rules 4.13(a), 4.13(a)(2), 4.13(a)(3), 4.13(a)(5) or Rule 4.5 or (ii) an exemption from CTA registration under CFTC Rule 4.14(a)(8) to annually affirm the applicable notice of exemption within 60 days of the calendar year end. A failure to file the affirmation notice by March 1, 2021 will result in (x) such failure being treated as a request to withdraw the relevant exemption and (y) the person possibly being required to register as a CPO or CTA and an NFA member.
NFA urged members to take "reasonable steps to determine the registration and membership status of these previously exempt persons," and outlined steps that members can take "to identify whether an exempt CPO/CTA has affirmed its exemption(s)". NFA also described how a member who learns they have been transacting customer business with an exempt CPO/CTA that has not affirmed its exemption and subsequently registered as a CPO/CTA and NFA member may avoid violating NFA Bylaw 1101 or Compliance Rule 2-36(d).
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