On March 17, 2010, the National Futures Association (“NFA”) announced its adoption of new Compliance Rule 2-46: CPO Quarterly Reporting Requirements (“Rule 2-46”), which will become effective on March 31, 2010. Rule 2-46 requires each registered Commodity Pool Operator (“CPO”) to report on a quarterly basis to the NFA specific information on certain commodity pools that it operates within 45 days after the end of each quarterly reporting period. The CPO must provide the information for each pool that it operates that has a reporting requirement under Commodity Futures Trading Commission (“CFTC”) Rule 4.22, which includes both non-exempt pools and exempt pools under CFTC Rule 4.7, but not exempt pools under CFTC Rule 4.13 (whether or not the CPO managing the 4.13-exempt pool is registered as a CPO or is exempt). Under Rule 2-46, the CPO must report to the NFA the following information with respect to each pool:
- the identity of the pool’s administrator, carrying broker(s), trading manager(s) and custodian(s), if any;
- a statement of changes in net asset value for the quarterly reporting period;
- monthly performance for the three months comprising the quarterly reporting period; and
- a schedule of investments identifying any investment that exceeds 10 percent of the pool’s net asset value at the end of the quarterly reporting period.
The reports must be made electronically, using the NFA’s EasyFile System. The first quarterly report will be due by May 17, 2010 for the quarter ended March 31, 2010.
According to the NFA, Rule 2-46 was necessary because the NFA was concerned that the current information it presently receives concerning commodity pools and their activities – particularly CFTC Rule 4.7-exempt pools – may not provide sufficient information for the NFA to adequately assess risks, identify trends, and assign audit priorities.1
In order to ensure that CPOs understand the new requirements, the NFA will host a webinar on April 13, 2010 at 12 p.m. (Eastern Time), which will outline the new reporting requirements and how to file using the new system. NFA staff will also provide detailed information on the new requirements and filing instructions at the NFA’s CPO/CTA Regulatory Seminar being held on April 22, 2010 in New York. For more information, also see NFA Notice to Members I-10-10, available on the NFA’s Web site, www.nfa.futures.org.