1. National Futures Association Registration Information for Swap FCMs, IBs, CPOs and CTAs

2. Today’s Presenters Yvette Christman, Senior Manager, Business Systems & Information Center Shamika Carr, Manager, Audits Alex Vorro, Communications Specialist

3. Webinar Agenda Filing requirements for FCMs, IBs, CPOs and CTAs The Registration Process The Application Process

4. Background The CFTC published final definitions for "swap", "security-based swaps" and "security-based swap agreements" on August 13 Firms that are not registered but acting as a swaps FCM, IB or CTA must register by October 12 Firms acting as CPOs are required to register by October 12 unless they have claimed an exemption

5. Associated Persons Any person associated with a firm newly registering as a swap FCM, CPO, CTA or IB that engages in activities involving swaps subject to CFTC jurisdiction must register as an Associated Person (AP)

6. Associated Persons Newly and currently registered FCMs, IBs, CPOs and CTAs whose activities include swaps subject to the jurisdiction of the CFTC must be approved as an NFA Member swaps designated firm

7. Associated Persons Registered APs whose activities involve swaps and are associated with an FCM, IB, CPO or CTA must be approved as a swap designated AP by NFA No Member may be approved as a swap firm unless at least one of its principals is registered as an AP and is approved as a swap AP

8. Registration Applications Currently registered firms and individuals can log in to NFA’s ORS to complete: o Form 7R for the firm o Form 8R for the APs

10. Filing Requirements Filing requirements for registration are: o A completed online Form 7R (which includes the NFA Membership application) o A non-refundable application fee of $200 for an IB, CPO or CTA; $500 for an FCM o An online Form 8R, fingerprint card and $85 fee for each principal

11. Filing Requirements If you apply for registration in multiple categories, you must pay the application fees for each category

12. Membership Dues $750 for an IB, CPO or CTA $1,500 for an FCM whose exchange is its DSRO or $5,625 if NFA is its DSRO Membership dues are paid in only one category—the category to which the highest dues apply

31. Who needs to be listed as a principal? Job titles Ownership Job duties

32. Job Titles Proprietor of sole proprietorship General Partner of a partnership Manager or Managing Member for an LLC Board of Directors President CEO, COO, CFO, CCO Any person in charge of a business unit subject to CFTC regulation

33. Ownership Any entity that directly owns 10% or more of any class of the Member’s equity securities, other than non- voting securities Any entity, other than non-voting securities, who has contributed 10% or more of the Member’s capital Any individual who directly or indirectly owns 10% or more of any class of the Member’s equity securities, other than non-voting securities Any individual who has contributed 10% or more of the Member’s capital

34. Individual Holding Company NFA Member Firm 50% Owner 100% Owner Indirectly owns 50% of Member Both the Holding Company and the Individual would need to be listed principals of the NFA Member Firm.

35. Job Duties An individual with controlling influence over the Member’s activities An individual who has control to make decisions that materially affect the firm’s futures, options, forex or swaps business without any sort of supervision

36. Criteria for Being Listed as a Principal The individual’s ability to control a Member’s business activities The individual’s formal title or position with the Member The individual’s financial or ownership interest in the Member

37. Who has to register as an AP? An individual who solicits orders, customers or customer funds on behalf of any NFA Member firm or someone who supervises other APs who are actually doing the soliciting Anyone who is in the supervisory chain-of-command and not only to persons who directly supervise Each firm must have at least one principal registered as an AP

38. Proficiency Requirements APs currently must pass a proficiency exam: National Commodity Futures Examination (Series 3) NFA has proposed rule amendments offering relief from the proficiency requirements for APs who exclusively deal in swaps CFTC has not yet acted upon this proposal

40. Branch Office Registration A branch office is any location, other than the firm’s main business address, where a Member’s APs are conducting business Each branch office must have a registered branch office manager

41. FCM Applicant Process An FCM must: o Maintain a minimum capital requirement of $1 million o Provide a financial statement certified by a CPA not more than 45 days old, or a certified statement as of the date not more than one year old and an uncertified statement not more than 17 business days old

42. FCM Applicant Process An FCM must provide a Source of Assets Letter, copies of bank statements and copies of various compliance procedures

43. IB Applicant Process An IB must maintain a minimum capital requirement of $45,000 NFA usually recommends $50,000

44. IB Applicant Process An IB must provide a financial statement certified by a CPA not more than 45 days old, or a certified statement as of the date not more than a year old and an uncertified statement not more than 17 business days old or an unaudited financial statement not more than 17 business days old

45. IB Applicant Process If the firm files an unaudited financial statement, it will be subject to an audit within six months of being registered

46. IB Applicant Process An IB also must: o Provide a Source of Assets Letter that describes the source of the firm's capital and the letter must state that capital will be used for the purpose of operating the business o Provide copies of bank statements and copies of various compliance procedures

47. CPO/CTA Applicant Process There is currently no applicant process for CPOs and CTAs CPOs and CTAs must submit a disclosure document to NFA before soliciting customers unless they have claimed an exemption The disclosure document must be reviewed and approved by NFA before the firm can provide it to its customers

48. NFA Publications Self-Examination Questionnaire Disclosure Document Guide Promotional Material Guide Regulatory Requirements Guide

49. Additional NFA Resources Registration Tutorial Videos Podcasts Webinars Workshops

50. Contact NFA NFA Information Center (312) 781-1410 (800) 621-3570 Information@nfa.futures.org

51. Questions?