New Quarterly Filing Requirements for CTAs under NFA Compliance Rule 2-46 to Commence with Quarter Ending September 30, 2013
Commentary by Steven Lofchie
In March 2013, the CFTC approved amendments to NFA Compliance Rule 2-46 to require CTAs to file NFA Form PR with the NFA on a quarterly basis, within 45 days of the end of each calendar quarter. However, the NFA delayed implementation of these reporting requirements at that time. The NFA has now issued Notice I-13-24, which notifies CTAs that they will be required to file NFA Form PR commencing with the quarter ending September 30, 2013. This first filing will be due on November 14, 2013.
NFA Form PR requires CTAs to provide the following information:
(i) Information Required on CFTC Form CTA-PR. CFTC Form CTA-PR is the CFTC's annual reporting form for CTAs, which requires general information about each CTA, its trading programs, pool assets directed by the CTA and the identity of the CPOs that operate those pools.
(ii) Key Relationship Information. NFA Form PR requires CTAs to provide information concerning the identity of the CTAs' carrying brokers and sub-advisors.
(iii) Trading Program Information. CTAs must provide information concerning certain trading programs offered them, including total funds allocated to futures and swaps, and monthly rates of return and assets under management for certain trading programs. However, a CTA is not required to provide rate of return and AUM information for certain trading programs, including pools listed with NFA (including pools operated pursuant to CFTC Rule 4.7), managed accounts that trade parallel to pools listed with the NFA, programs that do not trade commodity interests, programs for which all the assets are allocated to a sub-advisor, and programs that consist of separate accounts for the same (or affiliated) beneficial owners where trading is customized for those accounts.
All NFA-member CTAs, regardless of whether they are currently active, must submit NFA Form PR for each quarter. Filing NFA Form PR for the quarter ending December 31 will satisfy the annual CFTC Form PR filing requirement. All filings for both the NFA and the CFTC must be submitted through the NFA's EasyFile system, accessible at: http://www.nfa.futures.org/NFA-electronic-filings/easyFile-CTA-filers.HTML. The NFA has indicated that it intends to provide a webinar on filing NFA Form PR and further information later this month.
If you have any questions about Form PR, please contact Dorothy Mehta.
See: NFA Notice I-13-24.
See also: NFA Amends Compliance Rule on CPO and CTA Quarterly Reporting Requirements (April 24, 2013).
Commentary
NFA Form PR is significantly less onerous than NFA Form PQR, the quarterly reporting form for CPOs. While NFA Form PR contains certain additional questions not included in CFTC Form CTA-PR, with respect to a CTA's key relationships and trading program information, the Form contains important exclusions from the requirement for a CTA to provide rate of return and AUM information for various trading programs, including those for Rule 4.7 funds. While firms that also function as CPOs generally will be required to obtain this information for Form PQR reporting purposes, at least NFA Form PR does not duplicate this reporting requirement.