NFA Ramping Up CPO Examinations: Be Prepared

September 28, 2016

Over four years ago, the Commodity Futures Trading Commission (“CFTC”) rescinded the commodity pool operator (“CPO”) registration exemption found in CFTC Regulation 4.13(a)(4). As a result, many private fund managers relying on the exemption registered with the CFTC and became members of the National Futures Association (“NFA”).

In the years since, the number of CPOs has approximately doubled to historic levels. While this appears to have caused a strain on resources at the NFA, the inevitability of a visit from the regulator remains. Still, as many CPOs experience their fourth year of compliance obligations without an examination, they continue to ask the following question: When is the NFA coming?

As it turns out, the answer may be: soon. In recent months, we have seen a significant uptick in NFA examinations of our clients. With each passing day, the possibility of an NFA examination at your firm moves closer to becoming a reality. In addition, the NFA now has a staff presence in Great Britain, and they are actively performing onsite examinations of member firms in London, a practice that was once conducted remotely from the NFA’s offices in Chicago and New York.

How ACA Can Help
The approach and methodology used by NFA examiners is well known to ACA’s NFA division consultants, who are all former NFA examiners. ACA encourages registered CPOs to consider our expertise and familiarity with NFA examinations. ACA offers mock NFA examinations that will help any registered CPO prepare for its first NFA visit. For more information about this service, contact Scott Brindley or Rick Geissman at 212-951-1030.