Registered Funds Must Make NFA Filing by February 15 2013
The National Futures Association has notified all registered investment companies registered as commodity pool operators that they must make a notice filing by February 15. These new CPOs must file the annual questionnaire, but they only need to answer one question about RIC status. The first full questionnaire is not due until the anniversary of the firm’s NFA membership date. The NFA wants this information “in order to identify those pools that do not have to comply with certain Part 4 requirements and certain NFA Rules until the Commission adopts final rules governing the compliance framework for RICs subject to the CFTC jurisdiction.” Following Dodd-Frank, RICs that invest in futures, options, and swaps need to register as CPOs unless they use such instruments solely for “bona fide hedging purposes” or they limit purchases such that aggregate margin and premiums do not exceed 5% of the fund’s liquidation value (or if the net notional value does not exceed 100 percent of the liquidation value of the fund’s portfolio).
OUR TAKE: This is a good time for RICs registered as CPOs to begin implementing the NFA compliance infrastructure including designating responsible personnel.