A commodity pool operator (“CPO”) that has filed a registration exemption or exclusion under Commodity Futures Trading Commission (“CFTC”) Rules 4.5 or 4.13 (including Rule 4.13(a)(3)) must affirm such filing within 60 days of each calendar year end.
In addition, a commodity trading advisor (“CTA”) that has filed a registration exemption under CFTC Rule 4.14(a)(8) must affirm such filing within 60 days of each calendar year end.
The affirmations must be made online through the National Futures Association’s Exemption System. An exemption that is not affirmed by March 1, 2018 will be automatically withdrawn. A new filing made on or after December 1, 2017 does not need to be affirmed until 2019.
Pursuant to NFA Bylaw 1101, NFA members, including registered CPOs and CTAs, should follow procedures designed to ensure that they are not transacting business with non-members that are required to be registered. Such procedures, with respect to investors in a private investment fund (e.g., a hedge fund), typically include representations in subscription agreements and additional diligence. An NFA member doing business with a non-member that is exempt from CFTC registration has an obligation to periodically confirm that such non-member’s status has not changed. In the case of a non-member relying on an exemption that must be affirmed within 60 days of each calendar year end (e.g., the exemption provided pursuant to CFTC Regulation 4.13(a)(3)), the NFA member should determine whether such person has submitted its annual affirmation, intends to submit an annual affirmation, has registered with the CFTC or is taking some other action.
If you have any questions concerning the foregoing, please contact your primary attorney in Seward & Kissel’s Investment Management Group.
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If you have any questions regarding the matters covered in this memo, please contact any of the partners and counsel listed below or your primary attorney in Seward & Kissel’s Investment Management Group.
