CFTC Staff Letter 02-56 (No-Action): NFA Online Registration System Transition

CFTC Letter 02-56
CFTC Letter No. 02-56
May 7, 2002
No-Action
Division of Trading and Markets
Thomas W. Sexton, Esq.
General Counsel
National Futures Association
200 West Madison Street
Chicago, Illinois 60606-3447
Re: National Futures Association -- Request for Relief Regarding the Conversion to an Online Registration System Dear Mr. Sexton:
This is in response to your letter dated March 19, 2002, to the Secretary of the Commodity Futures Trading Commission ("Commission"), by which the National Futures Association ("NFA") submitted for review and approval, pursuant to Section 17(j) of the Commodity Exchange Act (the "Act"),[1] certain proposed amendments to its Registration Rules to implement an Online Registration System ("ORS") and requested certain relief. Your request for relief has been forwarded to the Division of Trading and Markets (the "Division") for response. Based upon your representations, we understand the facts to be as follows. Currently, applicants for registration with the Commission file hardcopies of the pertinent forms with NFA and the information is manually entered into the Membership Registration Receivables System ("MRRS") by NFA staff.[2] Beginning in June 2002, firm and individual applicants for registration with the Commission will file the pertinent forms with NFA electronically through ORS.[3] The transition from MRRS to ORS will require a "quiet period" of approximately two weeks when NFA will not be able to process any registration filings. You have indicated that at the end of business on May 17, 2002, NFA will cease accepting hardcopies of the registration forms that will only be accepted electronically through ORS beginning in June 2002. During the "quiet period," NFA will enter the information from any hardcopy forms received before May 17th into MRRS and then transfer the information contained in MRRS to ORS. In your letter, you noted that, because NFA will not process filings during the "quiet period," there might be situations in which applicants or registrants could be disadvantaged. When an associated person ("AP") or principal of a sponsor fails to become associated with the sponsor as an AP or affiliated with the sponsor as a principal, or the association of an AP or affiliation of a principal with a sponsor is terminated, NFA Registration Rule 214 requires the sponsor to notify NFA by filing a Form 8-T, within 20 days of either such occurrence. Pursuant to NFA Registration Rule 203(a)(10), if such notice is not received within 20 days of the occurrence requiring the notice, the sponsor must pay a late fee of $100. file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/02letters/tm02-56.htm (1 of 3) [5/6/2010 5:51:15 PM]