NATIONAL 

Via E-Mail (secretary@cftc.gov) 

Ms. Eileen Donovan 

Acting Secretary 

Commodity Futures Trading Commission 

Three Lafayette Centre 

1155 21 st St. NW 

Washington, DC 20581 

RECEIVED rT -... '· . 

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May 29,2007 

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COMMENT 

Re: Proposal Regarding the Registration of Intermediaries 

Dear Ms. Donovan: 

NFA fully supports the Commission's proposed amendment to CFTC 

Regulation 3.10 to require all persons registered as futures commission merchants, 

introducing brokers, commodity pool operators and commodity trading advisors 

("registrants") to annually complete an online review of their registration information on 

file with NFA. This amendment will help ensure that registration information remains 

accurate and current. 

Since July 2002, all registrants have electronically filed their registration 

applications and all updates thereto through NFA's Online Registration System ("ORS"). 

Before changing the registration process from paper to an electronic filing, NFA 

annually sent a pre-printed Form 7 -R to each registrant. The pre-printed form contained 

all of the registrant's current registration information. The firm, after reviewing the preprinted form and making any necessary changes or noting that no changes were 

needed, returned the form to NFA. The failure to return the form was deemed to be a 

request to withdraw from registration. NFA also sent a list of the firm's personnel with 

the pre-printed form for the firm to review and file termination notices if an individual was 

no longer with the firm. 

When NFA implemented ORS, the annual registration update process was 

discontinued because each firm had continuous access to ORS to make any necessary 

changes to its registration information. During the five years since deployment of ORS, 

NFA has received a number of requests from registrants for NFA to assist them in 

fulfilling their registration-related obligations by "pushing out" pertinent information to 

200 West Madison Street Suite 1600 Chicago, Illinois 60606 312.781.1300 800.621.3570 312.781.1467 fax www.nfa.futures.org 
them. NFA designed its online registration information review process to annually "push 

out" to the registrants all of their registration information for them to easily review and 

update. This process essentially mimics the old paper-based annual renewal process 

but in a more usable and efficient manner. 

Additionally, NFA takes very seriously the need to maintain the integrity of 

the CFTC's registration information and to protect the privacy of each registrant's 

information. The integrity and privacy of the information in ORS depends, in part, on 

access to the system only by users designated by each firm and authenticated by NFA. 

Consequently, keeping the list of ORS users current and accurate must be a high 

priority for every firm. Although NFA is unaware of any unauthorized access to any 

registrant's information in ORS, NFA has on occasion become aware of situations in 

which a firm has not deleted an ORS user's access even though that person is no 

longer affiliated with the firm. 

NFA also supports the proposed amendment's provision that a registrant's 

failure to timely complete the annual online registration review will be deemed a request 

to withdraw the registrant's registration. NFA believes that a registrant will have ample 

time to complete its annual registration review and this provision underscores and 

supports the importance to firms of accurately maintaining their registration information 

and ORS user lists. 

At this time, NFA also requests that the Commission consider as part of 

the current rulemaking a proposed amendment to CFTC Regulation 3.31 (c)(1) to extend 

the time period from 20 to 30 days for a sponsor to notify NFA that it has terminated an 

AP or principal. As you are aware, by letter dated May 22, 2007, NFA formally 

submitted to the Commission a petition for rulemaking that relates to this proposed 

amendment. 

As explained in NFA's petition, certain large FCMs that are also NASD 

member broker/dealers ("FCM/BDs") recently pointed out that they are subject to 

inconsistent regulatory requirements regarding the filing period for termination notices. 

While Regulation 3.31 (c)(1) requires sponsors to file these notices within 20 days, 

Article V, Section 3(a) of NASD's Bylaws allows termination notices to be filed within 30 

days. These FCM/BDs indicated that the futures industry's 20-day period is difficult at 

times to comply with when a termination notice contains disclosure information that has 

to be reviewed at the branch office and then by the legal and/or registration department, 

and on occasion the attorney representing the terminated AP, prior to the filing of the 

notice. To provide regulatory uniformity and address these concerns, NFA has adopted 

rule amendments to increase the filing period for a termination notice from 20 to 30 days 

and has submitted those amendments to the Commission for approval. If possible, NFA 

requests that the Commission include in the current rulemaking an amendment to 

Regulation 3.31 (c)(1) to allow sponsors to notify NFA within 30 days of the termination 

of an AP or principal. 

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If you have any questions concerning this letter, please do not hesitate to 

contact either Michael Crowley at (312) 781-1388 or mcrowley@nfa.futures.org or me at 

(312) 781-1413 or tsexton@nfa.futures.org. 

Respectfully submitted, 

Thomas W. Sexton 

Vice President and General Counsel 

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