NFA Releases Additional Reporting Requirements for CPOs and CTAs that Trade Virtual Currency Products

The National Futures Association (the "NFA") released an investor advisory on December 14, 2017, requiring each CPO and CTA, effective immediately, to notify NFA if it executes a transaction involving any virtual currency or virtual currency derivative on behalf of a pool or managed account by amending the firm-level section of its annual questionnaire. The following questions have been added to the firm-level section of the annual questionnaire:

CPO Questions:

• Does your firm operate a pool that has executed a transaction involving a virtual currency (e.g., bitcoin)? • Does your firm operate a pool that has executed a transaction involving a virtual currency derivative (e.g., a bitcoin future, option or swap)?

CTA Questions

• Does your firm offer a trading program for managed account clients (other than a pool you reported under the CPO questions) that has engaged in any transaction involving a virtual currency (e.g., bitcoin)? • Does your firm manage an account (other than a pool you reported under the CPO questions) that has executed a transaction involving a virtual currency derivative (e.g., a bitcoin future, option or swap)?

Beginning with the first quarter of 2018, CPOs and CTAs that have executed transactions involving virtual currencies or related derivatives will also be required to report the number of their pools or managed accounts that executed one or more transactions involving a virtual currency as well as the number of their pools or managed accounts that executed one or more transactions involving a virtual currency derivative during each calendar quarter. This information must be submitted to NFA through the firm's questionnaire no later than 15 days after the end of a quarter.

If you have any questions on these new requirements, please contact Daniel G. Viola at 212.573.8038 or dviola@sglawyers.com