The National Futures Association submitted to the Commodity Futures Trading Commission for its approval a new requirement that would mandate that registered commodity pool operators and commodity trading advisors submit two financial ratios on their quarterly reports to it on Forms PQR and PR, respectively. The required ratios would be current assets/current liabilities and total revenue/total expenses and must be calculated using the accrual method of accounting. The NFA said it seeks to obtain these ratios so that it might better monitor each CPO’s and CTA’s financial condition in order to identify firms that might be having financial troubles. CPOs and CTAs that are part of a holding company/subsidiary structure would have the option to report the ratios at the parent level, according to NFA. In addition, each CPO and CTA would be required to ensure it could demonstrate how it computed its ratios and to retain all financial records supporting its calculations. Importantly, stated NFA, it “is not establishing any minimum ratio that a firm must meet. Rather NFA will incorporate the financial information collected on Forms PQR and PR in to its oversight program and use it to identify trends that indicate that a firm may be facing financial difficulties which could impair its ability to act in the best interests of its customers.” NFA expressly noted that it would not constitute a rule violation solely because a CPO’s or CTA’s financial ratios suggested it might be experiencing financial problems. In January 2014, NFA sought comment regarding a possible new requirement that registered CPOs and CTAs maintain a minimum amount of capital, much like futures commission merchants and non-guaranteed introducing brokers currently are required. In a podcast summarizing the August 2016 NFA Board of Directors meeting, Dan Roth, NFA's chief executive officer, said that proposal proved to be a "spectacularly unpopular idea." (Click here to access this podcast; click here for background in the article, “NFA Seeks Comments on Possible New CPO/CTA Capital Requirements and Customer Protection Measures” in the January 23, 2014 edition of Between Bridges.) Currently, CPOs and CTAs are not subject to any capital requirement.