Filing Requirements | NFA (2024)

NFA Compliance Rule 2-49 requires swap dealers (SD) to promptly submit to NFA upon request any reports, documents or notices, including those required byCFTC Regulation 3.3 or Part 23 of the CFTC's regulations.

Capital

NFA Financial Requirements Section 18 requires SDs that are not subject to the rules of a prudential regulator (Covered SDs) to meet minimum capital and other financial requirements, as well as certain notification requirements from all SDs, including those required by Part 23 of the CFTC's regulations.

Capital Model Requirements

All Covered SDs must complete NFA's Capital Model Election Questionnaire in the EasyFile Capital Model Submission System. Covered SDs seeking to use internal models to calculate market and credit risk exposures for capital will be required to complete additional requirements.

Subordinated Loan Agreements

Covered SDs that are not registered with the SEC as a broker-dealer or security-based SD seeking to use subordinated debt to meet capital requirements must obtain pre-approval from NFA of the subordinated loan agreement (SLA). Proposed SLAs must be filed with NFA through WinJammerTM at least 30 days prior to the proposed execution date of the agreement. An SD Member may not use subordinated debt to meet its capital requirement, or make a pre-payment of previously approved subordinated debt, until it receives NFA's approval. For more information, see NFA Interpretive Notice 9078.

Filing of Financial Reports and Notices

Covered SD Members must submit regular financial reports to NFA and file certain notices with NFA in accordance with CFTC Regulations.

Covered SD Members that are SEC-registered broker-dealers or security-based SDs must file the regular financial reports using the FOCUS report if they otherwise file such reports with the SEC. All other Covered SD Members must file the reports using either the FR-CSE-NLA or the FR-CSE-BHC standardized forms.

Financial reports filed late will be subject to late filing fees of $1,000 for each business day they are late. Under Bylaw 1303, failure to pay the late fee(s) within 30 days of the due date will be deemed by NFA as a request by SD to withdraw from NFA membership.

Notices of Swap Valuation Disputes

Pursuant to CFTC Regulation 23.502(c), the CFTC authorized NFA to receive notices of swap valuation disputes in excess of $20 million filed bySDs. NFA receives and maintains the notices on behalf of the CFTC and provides summaries and reports regarding these notices to the CFTC. The CFTC has access to the firm's original documents on the day they are submitted to NFA.

The CFTC approved NFA's Interpretive Notice to NFA Compliance Rule 2-49, effective January 2, 2018, which, among other things, specifies the types of swap valuation disputes that must be reported and standardizes the information that SDs are required to report to NFA. See Notice I-17-13.

SDs must file the required notices of swap valuation disputes through WinJammer™.

Risk Data Reports

A key component of NFA's regulatory oversight program for SDs is the risk monitoring function, which allows NFA to identify firms that may pose heightened risk and allocate NFA's regulatory oversight resources accordingly. NFA's Board of Directors (Board) determined that NFA's risk monitoring function will be more effective if it includes the ability to monitor SD risk exposures on a regular basis. Therefore, NFA's Board approved a list of specific risk metrics that SDs will be required to report electronically to NFA on a monthly basis through EasyFile (Risk Data Filing). The first Risk Data Report as of December 29, 2017 will be due January 31, 2018. See Notice I-17-10.

SDs may now log into EasyFile to access the XSD to build XML files in order to upload data for the monthly risk data reports.

Risk Exposure Reports

CFTC Regulation 23.600(c)(2) requires each SD to provide its senior management and its governing body with a Risk Exposure Report on a quarterly basis and immediately upon detection of any material change in the SD's risk exposure. Each SD is also required to file a copy of the Risk Exposure Report with NFA and the CFTC through WinJammer™ within five business days of providing the report to its senior management. See Notice to Members I-14-20 and I-14-24 for more information.

In order to file the Risk Exposure Report through WinJammer™,SDs must create a "Regulation Notice—Swaps" in the filing index of WinJammer™ as of the ending date of the report, and then select the "Risk Exposure Report—Swaps" filing type. After selecting the appropriate notice, SDs must upload a PDF of the report. SDs will satisfy their CFTC filing requirement by submitting the Risk Exposure Report through WinJammer™ and do not have to file the report through the CFTC's portal.

Chief Compliance Officer Annual Report

CFTC Regulation 3.3 requires the Chief Compliance Officer (CCO) of each SD to prepare an annual written report containing the information outlined in CFTC Regulation 3.3(e) that covers the firm's most recently completed fiscal year. The annual report must also include a certification by the firm's CCO or CEO regarding the accuracy and completeness of the report. The report must be provided to the firm's senior officer or the board of directors. SDs are also required to submit the CCO Annual Report to NFA and the CFTC through WinJammerTM, not more than 90 days after the SD's fiscal year-end.

In order to file the CCO annual report through WinJammer™, SDs must create a "Regulation Notice—Swaps" in the filing index of WinJammer™ as of the ending date of the report, and then select the "Chief Compliance Officer Annual Report - Swaps" filing type. After selecting the appropriate notice, SDs must upload a PDF of the report. SDs will satisfy their CFTC filing requirement by submitting the CCO Annual Report through WinJammer™ and should not file the report through the CFTC's portal.

Annual Questionnaire

Each SD must complete NFA's Annual Questionnaire as part of its annual NFA membership renewal process. The questionnaire provides NFA with information on the firm's business activities. NFA also encourages SDs to keep the questionnaire data current throughout the year.

SDs can view and complete or update the Annual Questionnaire by logging into the Annual Questionnaire system.

Business Continuity and Disaster Recovery Plan – Contact Information

As part of a firm's Business Continuity and Disaster Recovery Plan (BCDR) requirements under CFTC Regulation 23.603, each SD is required to provide the CFTC with contact information for two employees with the authority to make key decisions on behalf of the SD, with knowledge of the firm's BCDR plan, and whom the CFTC can contact in the case of an emergency or other disruption. NFA requires each SD to provide NFA with the contact information for these two employees, as well as contact information for three additional employees with the same authority and knowledge. The firm must include its Chief Risk Officer as one of the employee contacts.

Each SD must provide this contact information to NFA and the CFTC through WinJammer™. Each SD is required to keep the contact information current by promptly updating WinJammer™.

Cybersecurity Incident Notices

NFA's Interpretive Notice requires Members notify NFA of certain cybersecurity incidents related to a Member's commodity interest activities. This notification can be completed through NFA's Cyber Notice Filing system.

Other Filing Requirements: Initial Margin Models for Uncleared Swaps

The CFTC's final rules on the margin requirements for uncleared swaps of SDs (CFTC's Margin Rules) allow SDs subject to the CFTC's Margin Rules (CFTC Covered Swap Entity) to choose between using a standardized table-based method for calculating initial margin or an internal risk-based initial margin model approved by the CFTC or NFA.

In order to submit margin model documentation, CFTC Covered Swap Entities must use NFA's EasyFile Margin Model Submission System. To initiate this process, contact Alessandra Riccardi, Managing Director, Models and Risk (ariccardi@nfa.futures.org or 212-513-6029). After exploratory discussions between NFA and the CFTC Covered Swap Entity, NFA will issue a letter to the firm that contains a unique link to the login page of NFA's EasyFile Margin Model Submission System.