CFTC and NFA Regulatory Relief for Commodity Pool Operators and Commodity Trading Advisors
Due to the ongoing COVID-19 pandemic, the Commodity Futures Trading Commission ("CFTC") and National Futures Association ("NFA") have provided regulatory relief for registered Commodity Pool Operators (“CPOs”) and Commodity Trading Advisors (“CTAs”).
On March 20, 2020, the CFTC issued temporary no-action relief (CFTC No-Action Letter 20-11) related to certain reporting obligations. Subsequently, on March 23, 2020, the NFA issued Notice to Members I-20-15, affirming the CFTC’s relief.
- Form CPO-PQR: CPO Members are required to file Form CPO-PQR (the CFTC’s reporting requirements pursuant to CFTC regulation 4.27, and NFA’s reporting requirements pursuant to Compliance Rule 2-46) on a quarterly basis for each pool that it operates within 60 days after the quarter-end for Q1, Q2, and Q3, and 90 days after the quarter-end for the Q4 filing (for small and mid-sized CPOs). The CFTC and NFA have extended the due date for the Q4 filing from March 30, 2020, to May 15, 2020. Large CPOs have already filed their Q4 PQR filing. Additionally, the due date for the Q1 filing (for small, mid, and large-sized CPOs) has been extended from May 30, 2020, to July 15, 2020.
- Form CTA-PR: The NFA requires CTA Members to file Form CTA-PR on a quarterly basis 45 days after each quarter-end. The NFA has extended the due date for the Q1 filing from May 15, 2020, to June 30, 2020.
- Pool Annual Reports: The NFA requires CPO Members to file annual reports with the NFA and distribute these annual reports to pool participants as outlined in CFTC Regulation 4.7(b) and 4.22(c). The CFTC and NFA have extended the time for CPOs to file the annual reports with the NFA and distribute them to pool participants to no later than 45 days after the original due date. Additionally, CPOs will be able to seek extensions up to 180 days from fiscal year-end pursuant to CFTC Regulation 4.22(f).
This filing relief is automatic, reflected by modified due dates in NFA’s relevant reporting systems. As such, there are no notification requirements associated with this relief.
- Pool Periodic Account Statements: The NFA requires monthly or quarterly account statements to be distributed to pool participants within 30 days after the end of the reporting period, as outlined in CFTC Regulation 4.7(b) and 4.22(c). The NFA and CFTC have extended the time period to distribute these statements to 45 days after the end of the reporting period.
The CFTC expects that registrants utilizing this relief establish and maintain a supervisory system that allows them to oversee the activities of its personnel while they work from a remote or alternative location during the pandemic, and that the relief will be withdrawn as the COVID-19 pandemic subsides.
Branch Office Relief
On March 13, 2020, the NFA issued Notice to Members I-20-12, providing relief to Member firms with Associated Persons (APs) working from a location other than the Firm’s main office during the COVID-19 pandemic.
The NFA requires that any location, other than the main office, where an AP conducts activity requiring registration to be listed as a branch office on their Form 7-R. Each branch office needs to have a branch office manager, who is required to pass the Series 30 proficiency requirement. However, this notice states that the NFA will not take disciplinary action against Members who allow their APs to temporarily work from any location that has not been listed as a branch office, with a branch office manager, on their Form 7-R due to the COVID-19 pandemic, in accordance with their business continuity plans. The notice also states that Members who take advantage of this relief should implement alternative supervisory methods to adequately supervise AP activities and ensure they meet their recordkeeping requirements.
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If you have any questions or would like to discuss this relief further, please contact Rick Geissman.