CFTC Matters: NFA Examinations—Overview, Hot Issues and Preparation

In 2012, the Commodity Futures Trading Commission (CFTC) modified the CFTC registration exclusion and exemption applicable operation of registered investment companies (registered funds) and related controlled foreign corporations (CFCs) that trade in commodity interests in order to avoid registration with the CFTC as a commodity pool operator (CPO). Beginning in 2013, many investment advisers to such registered funds and CFCs are required to register as CPOs and are required to become members of the National Futures Association (NFA), the self-regulatory organization that administers the CFTC’s registration regime. Pursuant to CFTC-delegated authority, the NFA oversees the activities and conducts examinations of all registered CPOs.

This column describes the NFA’s examination process for CPOs, points out current "hot button issues” and suggests actions to help newly registered CPOs prepare to handle NFA examinations efficiently and effectively.

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