NFA Proposes to Revise Requirements on Member Questionnaires

The NFA submitted to the CFTC proposed changes to compliance rules, bylaws and interpretive guidance related to Member Questionnaires requirements.

The NFA Board unanimously approved:

• the adoption of Compliance Rule 2-52 ("NFA Member Questionnaire Requirements") which will require Member firms to submit the Member Questionnaire at least annually and more frequently in certain specified circumstances, as well as set forth specific requirements regarding who at the firm must review, sign and submit the Member Questionnaire;
• the adoption of a related Interpretive Notice, to provide more specific guidance for Members regarding Compliance Rule 2-52, including the requirement that Members must update the Questionnaire when a "material change" to business operations arises that makes the Questionnaire's previously provided information inaccurate;
• certain clarifying amendments to NFA Bylaw 301(h) ("Suspension and Termination of Membership and Associate Membership").

The Board further amended:

• Bylaw 301 ("Requirements and Restrictions") to drop the "annual" terminology when referring to the Questionnaire. Therefore, the Questionnaire will be referred to as the Member Questionnaire;
• "Failure to Submit Annual Member Questionnaire under Compliance Rule 2-52," to deem the failure to file within 30 days following date of a request made by NFA as a request to withdraw from NFA membership.

The NFA invoked the "ten-day" provision of the CEA, making the following amendments to NFA Bylaw 301 and the adoption of NFA Compliance Rule 2-52 and related Interpretive Notice effective as early as ten days after receipt of this submission by the CFTC, unless the CFTC notifies the NFA that they determined to review the proposals for approval.