On June 30, the National Futures Association (NFA) published Notice to Members I-17-11, establishing an electronic process for a registered commodity trading advisor (CTA) to notify the NFA where the CTA uses a third-party recordkeeper. This notice is effected through the NFA’s electronic Exemptions System by claiming a “4.7(c)(2)” or “4.33” exemption, as applicable, and identifying the relevant third-party recordkeeper(s) used by the CTA.
The Commodity Futures Trading Commission Division of Swap Dealer and Intermediary Oversight (DSIO) previously provided relief to registered CTAs from the CFTC regulations, requiring books and records to be kept at the CTA’s main business office. As provided in the CFTC Exemptive Letter No. 17-24, a CTA may use a third-party recordkeeper as long as the CTA files a notice of claim with the DSIO containing the representations set forth in the exemptive letter. More information regarding Letter No. 17-24 is available in the April 28 issue of the Corporate and Financial Weekly Digest.
The NFA is now requiring notice of the third-party recordkeeping through the NFA’s Exemptions System. Detailed instructions for the Exemptions System are available in Notice I-17-11.