Wednesday March 10 2021

News Source: Fund Regulation

Focus: US Form CPO-PQR

Type: General

Country: US




On 5th March 2021, the National Futures Association (NFA) adopted Compliance Rule 2-50 and a related Interpretive Notice to require that CPO Members notify NFA when a commodity pool operated by a CPO Member is impacted by a market or other event that affects the ability of the pool to fulfil its obligations to participants.

National Futures Association (NFA) has submitted to the Commodity Futures Trading Commission (CFTC) the proposed adoption of NFA Compliance Rule 2-50 and the related Interpretive Notice entitled NFA Compliance Rule 2-50: CPO Notice Filing Requirements.

On February 18, 2021, NFA’s Board of Directors (“Board”) unanimously approved the adoption of the proposed rule and Interpretive Notice.

Rule 2-50. CPO Notice Filing Requirements

Each CPO Member must provide prompt notification, in the form and manner prescribed by NFA no later than 5:00 p.m. (CT) of the next business day upon the occurrence of one of the following events, in accordance with the related Interpretive Notice entitled CPO Notice Filing Requirements:

  • CPO Member operates a commodity pool that is unable to meet a margin call(s);
  • CPO Member operates a commodity pool that is unable to satisfy redemption requests in accordance with its subscription agreements;
  • CPO Member operates a commodity pool that has halted redemptions and the halt on redemptions is not associated with pre-existing gates or lockups, or a preplanned cessation of operations; or
  • CPO Member receives notice from a swap counterparty that a pool the CPO Member operates is in default.

NFA Compliance Rule 2-50

NFA Compliance Rule 2-50 requires CPO Members to promptly notify NFA in the following circumstances:

  • CPO Member operates a pool that cannot meet its margin call(s);
  • CPO Member operates a pool that is unable to satisfy redemption requests in accordance with its subscription agreements;
  • CPO Member operates a pool that has halted redemptions (not related to existing gates or lockups, or a pre-planned cessation of operations); or
  • CPO Member receives notice from a swap counterparty that a pool it operates is in default.

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