NFA Updates Swaps Proficiency Requirements for Advisers

The National Futures Association ("NFA"), which operates as the self-regulatory organization for the commodity futures and swaps industry, recently updated its rules related to swaps proficiency requirements for applicable NFA-regulated professionals.[1] These updates are likely applicable to a number of investment advisers and the adviser's personnel. As of January 31, 2021, investment advisers who are registered with the Commodity Futures Trading Association ("CFTC") (and NFA members) must pass one of two new swaps-related examinations. There are two different examinations—a "long track" and "short track" examination. Adviser compliance personnel should assess the relevant regulations to determination which track their registered personnel must review. There is no grandfathering exemption for applicable personnel. Anyone to whom the requirements apply (generally, investment advisers and adviser personnel engaged in swaps trading) must pass the appropriate track.

The tracks are presented as education modules and are not "examinations," differentiating them from traditional Financial Industry Regulatory Authority license examinations many NFA members and investment adviser personnel must pass. While many investment adviser compliance personnel spend significant time and resources ensuring compliance with the Investment Advisers Act of 1940, CFTC and NFA requirements often receive less time and attention. Adviser compliance personnel should ensure applicable firms are prepared for the new education requirements.

For more information, contact Erik Hansen or another member of Ice Miller's Business Group.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.