The National Futures Association ("NFA") highlighted developments relating to enhanced regulatory responsibilities under Dodd Frank, international membership, technology, governance and cybersecurity in its 2016 Annual Review.
In a letter to members on page 4 of the review, NFA President and CEO Daniel J. Roth stated:
Of all the forces that have reshaped NFA, the one with likely the most impact was Dodd-Frank and the regulatory framework put in place to oversee an entirely new category of NFA Members – swap dealers.
The review outlined the following developments:
- Increased Regulatory Responsibilities. The CFTC involved the NFA in the oversight of, among other things, (i) margin requirements for uncleared swaps, (ii) responsibilities relating to swap valuation disputes under CFTC Rule 23.502(c), and (iii) an enhanced examination program for futures commission merchants. In addition, both designated contract markets and swap execution facilities may now request that the NFA perform audit trail and recordkeeping reviews.
- International Presence. The NFA expanded its membership to include approximately 600 non-U.S. members and provided training to members and other regulators in London, Malta, Amsterdam, Dublin and Madrid. In addition, the NFA was appointed Vice Chair of IOSCO's Affiliate Members Consultative Committee, and in this capacity provided input into IOSCO's policies and contributed to IOSCO reports on various topics, including FinTech and the foreign exchange market.
- Technological Solutions. The NFA (i) launched the NFA Dashboard, a new entryway to its Online Registration System, and (ii) continued to rebuild its primary analytical "FACTS" system.
- Governance. The NFA reduced its Board of Directors from 37 to 29 members.
- Cybersecurity. In a March 2016 Interpretive Notice, the NFA required member firms to adopt written policies and procedures to secure customer data and access to their electronic systems.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.