NFA proposed to require a CPO to notify NFA upon an event that may affect the ability of its pool to fulfill its obligations to pool participants.
NFA Compliance Rule 2-50 ("CPO Notice Filing Requirements") would require a CPO to notify NFA no later than the next business day after one of the following events:
- a pool operated by the firm is unable to meet its margin calls, including where the amount of the call is disputed;
- a pool operated by the firm cannot satisfy redemption requests in accordance with its subscription agreements;
- a pool operated by the firm halts redemptions other than pursuant to the terms of preplanned events; or
- a swap counterparty notifies a CPO that a pool the CPO operates is in default.
NFA clarified that Compliance Rule 2-50 would, consistent with Compliance Rule 2-45 ("Prohibition of Loans by Commodity Pools to CPOs and Affiliated Entities"), apply to an exempt pool.
Additionally, NFA attached a related interpretive notice that clearly defines the types of events that would trigger the new reporting requirements.
Barring review by the CFTC, the proposed rule and interpretive notice will go into effect 10 days following submission to the CFTC.
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