NFA Proposes Amendments Requiring Firms to Maintain Records of Electronic Communications

The National Futures Association ("NFA") proposed to the CFTC amendments to the NFA's Interpretive Notice titled Compliance Rules 2-9: Enhanced Supervisory Requirements. The Interpretive Notice requires member firms to adopt enhanced supervisory requirements based upon the regulatory background of its associated persons ("APs") or principals.

The Interpretive Notice includes a requirement that firms record all telephone conversations between APs and customers. In light of the increased prevalence of electronic written communications (e.g. text messages and emails), the NFA proposed to revise the Interpretive Notice to specifically provide that firms must maintain a record of all electronic written communications. It also proposed to require (i) member firms to prepare a catalog of electronic written communications and (ii) APs to maintain a log of all written electronic communications.

The NFA proposed to make the proposed amendments effective ten days after submission, unless the CFTC determines to review the proposals for approval. The NFA Board of Directors unanimously approved the proposals.