NFA Amends Member Questionnaire

The National Futures Association (“NFA”) recently published amendments (the “Amendments”)¹ to the Member Questionnaire, formerly Annual Questionnaire, (the “Questionnaire”), which will become effective on October 15, 2024. The Amendments will impact the frequency with which NFA member firms (“Members”), including asset managers who are registered commodity pool operators (“CPOs”) and commodity trading advisors (“CTAs”), are required to update the Questionnaire and will require Questionnaire updates to be filed by a person who is both a registered associated person (“AP”) and listed principal of the Member.

Change in Frequency of Updates

Currently, Members are required to update the Questionnaire on an annual basis. Once effective, under certain circumstances, Members will be required to update the amended Questionnaire on a more frequent basis:

• Material Change in Business Operations. Upon a material change in a Member’s business operations, it will be required to update those provisions in the Questionnaire which contain information that is inaccurate or incomplete. It is generally up to each Member to determine whether a given change in operations is material. New Interpretive Notice 9082 clarifies that any of the following would require an update to the Questionnaire: engaging or ceasing to engage in activities which relate to commodity interest products, micro-contracts, retail forex, digital assets, algorithmic trading or cloud computing; a significant increase or decrease in customer accounts; and operating a pool that has just commenced operations. The expectation is that during these off-cycle updates, Members will update only those portions of the Questionnaire that are materially inaccurate or incomplete and not the entire Questionnaire.
• Bi-Annual Updates for Inactive Firms. Members who answer “No” to all questions in the Questionnaire relating to whether a Member engages in commodity interest activities will be deemed to be “Inactive.” Notably, the NFA does not and will not have a formal Inactive membership status. Nevertheless, Inactive Members will be required to update the commodity interest business portions of the Questionnaire on a bi-annual basis and the Member’s public profile on NFA BASIC will prominently indicate that the Member is Inactive.

Members will continue to be required to update the entire Questionnaire on at least an annual basis. The update due date will be provided to the Member by the NFA prior to the Member’s NFA membership anniversary date. Failure to complete and submit the Questionnaire by the due date will be deemed by the NFA to be a request by the Member to withdraw its NFA membership.

Updates Required to be Filed by an AP/Principal

For CPO and CTA Members, the Questionnaire must be reviewed, signed and filed by a person who is both registered as an AP and listed as a principal of the firm. It is our understanding that the NFA plans to implement functionality to allow a delegate to initially prepare responses to the Questionnaire that will then be provided to the AP/principal for review, signature, and submission.

Please contact Jeremy A. Liabo, Katherine Forrester-Quek, Trea N. Harris or the Ropes & Gray attorney who usually advises you for further information, or with any questions you may have.