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NFA proposed amendments to Compliance Rule 2-49 ("Swap Dealers and Major Swap Participants Regulations") to clarify that member swap dealers who violate the trade execution requirements of Rule 37.12 ("Trade Execution Compliance Schedule") or Part 50 ("Clearing Requirement and Related Rules") of the CFTC's rules also will have violated an NFA requirement.
NFA explained that the proposed amendment incorporates trade execution and mandatory clearing requirements for swaps into Compliance Rule 2-49 that are not contained in Rule 3.3 ("Chief Compliance Officer") or Part 23 ("Swap Dealers and Major Swap Participants") of the CFTC's rules.
Barring further review by the CFTC, the proposed amendment will go into effect 10 days after it is received by the CFTC.
Commentary
In many ways, this is a very technical change. Many market participants likely expect that a violation of the Commodity Exchange Act or the CFTC regulations by an NFA member is a violation of NFA rules as well. At least when it comes to swaps, the NFA's latest change would leave a very small subset of swap-related CEA/CFTC violations that are not per se violations of NFA rules.
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