Rescinded Rule 4.13(a)(4)
This rule had primarily been used by fund sponsors with only highly qualified individuals and entities as investors in order to avoid registration with the CFTC as a CPO and to avoid compliance with CFTC disclosure, reporting, or recordkeeping requirements. CPOs previously exempt under this rule are not grandfathered in.
Rescinded Annual Report Certification Requirement Relief
All CPOs operating under the 4.7 exemption will now be required to have annual audited financial statements prepared in accordance with GAAP and certified by an independent accountant.
Part 4 Rules Addition: Annual Notice for Continued Exemptive or Exclusionary Relief
CPOs and CTAs relying upon registration exemptions or exclusions under Rules 4.13 or 4.5 will need to file exemption renewals annually with the NFA within 60 days of the end of each calendar year.
If you need further information on these changes, preparing for them, and incorporating them, please do not hesitate to contact Mike@cogcpa.com or call at 630-351-8942.
Last week the NFA levied a $100,000 fine against an introducing broker out of Chicago.
The Complaint alleged the IB failed to diligently supervise operations, provided late AML Training, conducted an inadequate AML Audit, included two misleading statements on its website, and did not adequately review promotional material.
Therefore, the IB must adopt specific undertakings to detect and prevent unsupervised contacts between APs and customers as well as ways to identify potential problematic trading in customer accounts.
Avoid These Costly Fines
Summer is a perfect time to get your compliance house in order. Mike Coglianese is a former NFA Auditor with 20 years of experience in NFA compliance. If you need assistance with your compliance program or a review of your current procedures, contact Mike at 630-351-8942 or email mike@cogcpa.com.
Michael Coglianese CPA, P.C. is one of the Platinum Sponsors of a The Trader’s Exchange, a networking group of CTAs, IBs, Capital Allocators, CPOs, and Hedge Funds coming together to expand business opportunities across the U.S. Mike enjoyed the opportunity to provide a fun atmosphere conducive to relationship building. Over 120 traders and industry professionals attended the event in New York on April 18th. If you would like an invitation to these events, please visit www.TheTradersExchange.com.
