The NFA proposed (i) amendments to NFA Bylaw 301 and NFA Compliance Rule 2-24, and (ii) an Interpretive Notice relating to proficiency requirements for individuals engaged in swaps activities. In general, the amendments require that any individual engaged in swaps activities (whether registered as a swap firm intermediary or swap associated person ("AP")), or simply acting as an AP of a swap dealer, satisfy NFA's Swaps Proficiency Requirements.
The NFA proposed to amend:
- NFA Bylaw 301(I) to specify that "any individual applying for approval" as a futures commission merchant, introducing a broker, a CPO or a commodity trading advisor member swap firm, or an AP of such member, must pass the NFA's Swaps Proficiency Requirements to be granted approval as a swap firm or swap AP, respectively; and
- NFA Compliance Rule 2-24 to prohibit a swap dealer member from having associated with it an individual person who is "acting as" an AP unless that individual has satisfied the NFA's Swaps Proficiency Requirements.
Further, the proposed Interpretive Notice, titled NFA Bylaw 301 and Compliance Rule 2-24: Proficiency Requirements for Swap APs, provides more information on meeting NFA's Swaps Proficiency Requirements.
This proposal will become effective ten days after receipt by the CFTC, pending approval.
Commentary / Dorothy Mehta
NFA members involved with swaps activities should take note that, consistent with recent NFA efforts and prior rulemaking, proficiency exams for swap APs will now be a requirement.
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.