The NFA proposed incorporating certain supervisory requirements and technical amendments that concern swap activities in its Compliance Rules and Interpretive Notices.
The proposal would amend, among other things:
- NFA Compliance Rule 2-9 ("Supervision") to apply supervisory obligations to swap dealers and majority swap participants, including non-U.S. swap dealers who operate in areas of substituted compliance with their home jurisdiction requirements; and
- NFA Compliance Rule 2-36 ("Requirements for Forex Transactions") to require forex dealer members to adopt additional supervisory requirements depending upon the employment history of associated persons or principals, or total charges to customers.
The proposal would also amend Interpretive Notice 9010 to, among other things, reinforce the obligation of swap dealers not to permit the involvement of individuals subject to statutory disqualification in effecting swaps.
The proposal would also update the corresponding interpretative notices to align with the proposed rule amendments. The effect would somewhat expand the scope of the notices (for example, by changing a reference to "telemarketing" to the more general reference to "sales practices").
Unless the CFTC notifies the NFA that the CFTC objects to the proposed changes, the rules changes will go into effect without further action by the CFTC. The NFA indicated that it plans to issue a Notice to Members establishing the effective date for the proposal.
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