Effective date of amendment to Compliance Rule 2-46: Late fee for NFA Forms PQR and PR filings NFA recently amended NFA Compliance Rule 2-46 to impose a $200 late fee on commodity pool operator (CPO) and commodity trading advisor (CTA) Members for each business day the Member files its quarterly NFA Form PQR or PR after the due date. The late fee is effective for all NFA Forms PQR and PR required under NFA Compliance Rule 2-46 beginning with reports dated September 30, 2016 and later. For Form PQR, the late fee will apply to the CPO entity and will not be…...

NIBA: Ask NFA June 2016 As your industry advocate, the NIBA provides many services which help your business stay in compliance with NFA regulations. “Ask the NFA,” is the way you can ask questions about those regulations and compliance requirements without having to call NFA directly. Just email us at [email protected] and we will get the answers for you. Please keep in mind the purpose of this contact is to keep the lines of communication between the NFA and NIBA members. The answers were supplies by NFA staff. This month’s questions were selected from those submitted by NIBA members. The…...

As your industry advocate, the NIBA provides many services which help your business stay in compliance with NFA regulations. “Ask the NFA,” is the way you can ask questions about those regulations and compliance requirements without having to call NFA directly. Just email us at [email protected] and we will get the answers for you. Please keep in mind the purpose of this contact is to keep the lines of communication between NFA and NIBA members open, not to fix any specific individual concerns. This month’s questions were selected from those submitted by NIBA members. The answers were supplied by NFA…...

FINANCIAL CRIMES ENFORCEMENT NETWORK Customer Due Diligence Requirements for Financial Institutions Finalized On May 11, 2016, the Financial Crimes Enforcement Network (“FinCEN”) issued its final rules under the Bank Secrecy Act (“BSA”) to strengthen and clarify the customer due diligence (“CDD”) requirements for covered financial institutions such as: bank; brokers or dealers in securities; mutual funds; and futures commission merchants (“FCMs”) and introducing brokers in commodities. Such financial institutions, under the final CDD rules (“CDD Rules”), will now be required to verify and identify the beneficial owners of all legal entity customers during the account opening process. Further, the CDD…...

CME Group’s Regulatory Outreach Program provides market participants with the information and resources necessary to meet their compliance needs. Our goal is to work with market participants proactively to ensure they understand our regulatory requirements and thereby avoid potential problems in the future. The program aims to: Effectively communicate rule modifications, rule advisories and other rules-based information to market participants Promote a uniform understanding of Exchange rules and regulations Serve as a resource for trade practice and surveillance based questions Build constructive, ongoing relationships with industry participants Proactive compliance and more informed customers make better markets. Outreach is available for…...

In light of the almost daily news about cybersecurity breaches, including at financial institutions, and the significant threat and damage these breaches could cause to NFA’s Member firms, customers, and the U.S. derivatives industry, NFA developed guidance requiring Members to adopt and enforce procedures to secure both customer data and access to their electronic systems. With ongoing technological advancements, it is important to ensure Members have supervisory practices in place that are designed to identify cybersecurity risks, implement appropriate safeguards, and respond accordingly should an attack occur. Cybersecurity Interpretive Notice The Cybersecurity Interpretive Notice became effective on March 1, 2016.…...

Attaining a Viable Cyber Security Program at a Reasonable Price; is it Possible? We’ve all heard about the hacks at Sony, Target, and even the U.S. Government. Fortune 500 companies and US government agencies getting hacked is exciting news. Well, actually – it’s terrifying. And even more disturbing is the complexity associated with solving this problem. For a Fortune 500 company, the solution involves throwing money at the problem by hiring another 25-50 cyber security experts and investing another $50-$100m in cyber security. But what if you’re a smaller firm, but no less meaningful to its owners or stakeholders, with…...

As your industry advocate, the NIBA provides many services which help your business stay in compliance with NFA regulations. “Ask the NFA,” is the way you can ask questions about those regulations and compliance requirements without having to call NFA directly. Just email us at [email protected] and we will get the answers for you. Please keep in mind the purpose of this contact is to keep the lines of communication between NFA and NIBA members open, not to fix any specific individual concerns. This month’s questions were selected from those submitted by NIBA members. The answers were supplied by NFA…...

How or when to select or change a fund audit firm for your hedge fund, CTA or other alternative investment business can seem like a daunting decision for any fund manager. However, it can be done with the right considerations and processes in place. WHEN TO SELECT A FUND AUDITOR Many fund managers are under the assumption that since fund audits are typically performed at year end that they don’t need to search for a fund auditor until much later. However, it’s actually in a fund managers’ best interest to select their fund auditor as soon as a fund is…...

Whether you are running a hedge fund, Introducing Broker, CTA, or CPO you are required to spend most of your time managing your investors, investments, and returns. In our regulated industry, you also need to hire an attorney, an auditor, a compliance expert, and an administrator that compiles your monthly performance results. These hires can be considered necessary evils. But if you hire the right team, you can extract more value to drive efficiency and reduce your business risk so you can focus more time on working with you investors, managing investments, and more importantly, making money. I have been…...