NFA and CFTC Continue to Respond to COVID-19

The Commodity Futures Trading Commission (CFTC) has further supplemented no-action relief for market participants by issuing a staff letter for commodity pool operators (CPO), and the National Futures Association (NFA) has issued similar relief for CPOs and commodity trading advisers (CTA).

CPO Relief

On March 20, 2020, the Division of Swap Dealer and Intermediary Oversight (DSIO) provided no-action relief to CPOs, subject to the applicable conditions stated below:

Form CPO-PQR under CFTC Rule 4.27. Any requirement that a small or mid-sized CPO file an annual report on Form CPO-PQR pursuant to CFTC Rule 4.27, provided that such filing is made by May 15, 2020; or any requirement that a Large CPO file a quarterly report on Form CPO-PQR for Q1 2020 pursuant to CFTC Rule 4.27, provided that such filing is made by July 15, 2020.
Pool Annual Reports under CFTC Rules 4.7(b)(3) and 4.22(c). Any requirement that a CPO with a pool annual report due on or before April 30, 2020 file such report pursuant to CFTC Rule 4.7(b)(3) or 4.22(c), provided that the annual certified financial statements for its operated commodity pools are filed with the NFA and distributed to pool participants no later than 45 days after the due date for such report. This relief does not foreclose a CPO from requesting an additional extension of time not to exceed a total of 180 days from the end of the pool’s fiscal year consistent with CFTC Rule 4.22(f).
Pool Periodic Account Statements under CFTC Rules 4.7(b)(2) or 4.22(b). Any requirement that a CPO distribute periodic account statements to pool participants on either a monthly or quarterly basis under CFTC Rule 4.7(b)(2) or 4.22(b)(3) provided that such statements are distributed to participants within 45 days of the end of the reporting period for all reporting periods ending on or before April 30, 2020.

Relief specific to CPOs is available in CFTC Letter No. 20-11.

On March 23, 2020, NFA issued similar CPO relief in a Notice to Members.

CTA Relief

NFA also provided CTAs reporting relief. NFA Compliance Rule 2-46 requires each CTA member to file the NFA Form PR on a quarterly basis with NFA within 45 days after the end of each quarter. CTA members would be required to file the form for the quarter ended March 31, 2020 by May 15, 2020. NFA extended the due date for the March 31 NFA Form PR until June 30, 2020.

Other NFA Relief

On March 18, 2020, NFA issued its own notice to members providing relief from its Rulebook consistent with COVID-19 no-action positions issued the previous day by the CFTC. NFA confirmed that members will receive relief with respect to timestamp recordkeeping and oral recording requirements. NFA also granted 30-calendar-day relief to forex dealer members that are required to prepare a chief compliance officer (CCO) annual report due between March 31, 2020 and September 1, 2020.

Operational Changes and Public Resources

Additionally, the CFTC and NFA staffs have launched webpages consolidating their COVID-19 communications to market participants and derivatives customers. The CFTC created a webpage for its staff letters containing regulatory relief for remote trading and a customer advisory for frauds seeking to profit from recent market volatility related to COVID-19.

NFA created a webpage to track COVID-19 regulatory and operational changes. NFA’s staff is largely working remotely, and the following changes have been implemented in response:

New NFA arbitration claims must be filed online rather than by mail.
NFA’s Chicago office has suspended its applicant fingerprinting service until further notice.
The administrator of the National Commodity Futures Examination (NCFE or Series 3), has temporarily closed its test centers in the United States and Canada for a period of 30 days, starting March 18. More information on the closing is available here.

Other Mayer Brown Regulatory Updates

The foregoing CFTC relief and changes supplement other measures by the CFTC and NFA. See our Legal Updates:

For CFTC firms dually registered with the SEC and FINRA, Mayer Brown has provided Legal Updates regarding similar regulatory actions by those agencies.

The derivatives and securites law updates are part of an evolving COVID-19 response that is moving across regulatory agencies. Please visit our website to learn more.

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