CFTC Adopts Revised Form 8-R
The CFTC adopted a revised Form 8-R. Individuals must use the revised form to register with the CFTC as an associated person of a registrant, floor broker or floor trader, or to be listed as a principal of a registrant. The revisions to Form 8-R include:
- Two new categories of registered persons – "entity floor trader" and "floor trader order enterer";
- Modifications to the fingerprinting information section to address exemptions to that requirement that exist in CFTC Regulation 3.21(e);
- A clarification to the disciplinary history section as to what types of previous employment are within the scope of the regulation;
- A modification to the financial disclosure provisions to clarify that the scope is not limited to futures and captures all CFTC-regulated products; and
- An update to the disciplinary history section that allows applicants to complete separate "Disclosure Matter Pages" for each relevant event. This update allows applicants to provide required supplementary information regarding an applicant's disciplinary history.
The revised form will be effective as soon as it becomes available on the NFA's website.
Commentary
The change to the disciplinary history section is potentially significant. Under the current form, persons must disclose the disciplinary history of any firm where the applicant was a principal at the time. The revised form clarifies that such disclosure is not limited to firms that are CFTC registrants, but captures any entity. The CFTC never explains this clarification (though it refers to the interpretation as "long-standing"). The CFTC should make the case why it is necessary for a person to disclose the disciplinary history of every firm he or she was a principal of, even where such firms may be wholly unconnected to the businesses overseen by the CFTC.
Forms like 7-R and 8-R are significant regulatory tools that impact every CFTC registrant and a large population of persons working at such firms. They are not simply registration obligations; rather, a person constantly must update these forms. As anyone who has completed these forms is aware, the task often can be challenging (especially for large financial institutions). There are a number of difficult interpretive questions that the forms raise that are unaddressed by this most recent update. Changes to forms like this should be made through notice-and-comment rulemaking (regardless of whether the CEA or Administrative Procedure Act would require it).