NFA Amends Member Questionnaire and Branch Office Supervision Requirements

The National Futures Association ("NFA"), the industry-wide self-regulatory organization for the derivatives industry, has amended its Rules and related Interpretive Notices (i) to eliminate the requirement that an associated person ("AP") and principal review, sign and submit the Member Questionnaire; and (ii) to permit a member firm to designate a single branch office manager to supervise more than one branch office and to supervise remotely, on a full or part-time basis, where the member firm has appropriate supervisory procedures in place. The amendments to the Member Questionnaire requirement are effective June 15, 2026 and the branch office amendments become effective July 1, 2026.

Background

Compliance Rule 2-52 and Interpretive Notice 9082 - Requirements in Connection with NFA's Member Questionnaire

Under NFA Compliance Rule 2-52, each NFA member firm, including a registered commodity pool operator or a registered commodity trading advisor, must complete and submit a Member Questionnaire on at least an annual basis, or sooner in the event of a material change to the member firm's business operations.

Since October 2024, Compliance Rule 2-52 has required that, except for swap dealers, an AP and principal of the member firm review, sign and submit the Questionnaire. This requirement was adopted to help assure that the individual responsible for completing the Questionnaire is sufficiently knowledgeable about the member firm's business operations. Member firms have noted that the person most knowledgeable about the information within the Questionnaire is often not registered as an AP because that individual is not engaged in soliciting customers or supervising those who do. In response, NFA recognized that the activities which require AP registration are distinct from the operational activities performed by an individual who is sufficiently knowledgeable to complete and submit the Questionnaire. NFA's Board therefore approved amendments to Compliance Rule 2-52 and the related Interpretive Notice 9082 to permit a listed principal, or any other senior level individual who is sufficiently knowledgeable about the member firm's business operations, to review, sign and submit the Questionnaire.

Interpretive Notice 9002 - Registration Requirements: Branch Offices

Historically, NFA has required that, if a member firm has one or more branch offices, each such location must have a different branch office manager. Based upon a request from the Futures Industry Association and in recognition that technological advances have made it possible for a branch office manager to supervise more than one branch office and to do so remotely (on either a full or part-time basis), NFA's Board approved amendments to Interpretive Notice 9002 permitting member firms to allow this type of supervisory arrangement, provided the member firm can demonstrate that it is appropriate in the circumstances. In this regard, the amendments require that the member firm adopt and implement supervisory procedures reasonably designed to ensure a branch office manager can effectively supervise the APs' activities at more than one branch office and on a remote basis. These amendments include a requirement that the member firm revisit any such supervisory arrangement if it becomes aware of any instances of misconduct involving a branch office.

Discussion

These amendments should be helpful in facilitating NFA member firms' compliance with applicable requirements and in reducing unnecessary regulatory burdens, without compromising NFA's regulatory objectives. NFA also noted that the amendments to Interpretive Notice 9002 harmonize NFA and FINRA requirements regarding branch office managers.

Conclusion

Member firms may wish to begin to review and update their existing policies and procedures, including supervisory policies and procedures, to reflect these amendments.

We will continue to monitor and report on developments in this area.

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