NFA Revises Section 4s Review Process for Swap Dealers and Major Swap Participants

The NFA revised the procedure requiring swap dealers ("SD") and major swap participants ("MSP" ) to demonstrate an ability to comply with applicable CFTC regulations. Under the process, SDs and MSPs are required to submit documentation demonstrating their ability to comply with CEA Section 4s ("Registration and Regulation of Swap Dealers and Major Swap Participants"). The NFA then conducts a detailed review of each firm's 4s submissions on a topic-by-topic basis, and prepares a letter ("Feedback Letter") that comments on any areas in which the firm's documentation does not demonstrate adequately the SD's or MSP's ability to comply with a particular 4s requirement.

Modifications to the 4s submission review process include the following:

• effective immediately, an SD or MSP will not be required to submit additional documentation or revisions in response to Feedback Letters;
• instead of submitting revised documentation to the NFA, each SD or MSP will be required to submit an attestation signed by a firm principal attesting that the firm has revised its policies and procedures to address comments in the Feedback Letter;
• the NFA will continue to issue all Feedback Letters through the NFA's EasyFile Registration Documentation Submission System ("RDSS");
• once the attestation is completed and filed with it, the NFA will issue a letter ("Acknowledgment Letter") informing the SD or MSP that the NFA does not have any further inquiry regarding the 4s topic area at that time.

The NFA specified that for 4s topic areas where firms have an active 4s Feedback Letter (i.e., where the NFA has not issued an Acknowledgment Letter), it will update its RDSS by reissuing Feedback Letters, as applicable, that identify where an attestation must be submitted. Although SDs and MSPs will not be required to submit additional or revised documentation to the NFA through the RDSS, the NFA will review each firm's revised policies and procedures as part of the examination process or other regulatory oversight processes.