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NFA Updates Swap and Forex Supervisory Obligations

NFA adopted supervisory requirements and technical amendments concerning swap activities. The requirements are effective as of September 30, 2019.

The changes were adopted as proposed (see prior coverage) and will amend:

  • NFA Compliance Rule 2-9 ("Supervision") to apply supervisory obligations to swap dealers and majority swap participants, including non-U.S. swap dealers who operate in areas of substituted compliance with their home jurisdiction requirements;

  • NFA Compliance Rule 2-36 ("Requirements for Forex Transactions") to require forex dealer members to adopt additional supervisory requirements, depending upon the employment history of associated persons or principals, or total charges to customers;

  • Interpretive Notice 9010 to, among other things, reinforce the obligation of swap dealers not to permit the involvement of individuals subject to statutory disqualification in effecting swaps; and

  • corresponding interpretative notices to align them with the proposed rule amendments to expand the scope of the notices somewhat (e.g., by changing a reference to "telemarketing" to a more general reference of "sales practices").

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