NFA’s Swaps Proficiency Requirements to come into effect on January 31, 2020

Maria Nikolova

Registered associated persons engaging in swaps activities and individuals acting as APs at swap dealers will have one year to complete the requirements.

The United States National Futures Association (NFA) has earlier today issued a notice about the Swaps Proficiency Requirements. These will launch and become accessible online on January 31, 2020.

Each individual who is approved as a swap associated person (AP) at a futures commission merchant (FCM), introducing broker (IB), commodity pool operator (CPO) or commodity trading advisor (CTA) Member firm or is acting as an AP at a swap dealer (SD) on January 31, 2021 must satisfy NFA’s Swaps Proficiency Requirements in order to remain approved as a swap AP or continue acting as an AP at an SD after this date. This deadline gives registered APs engaging in swaps activities and individuals acting as APs at SDs one year to complete the requirements.

After January 31, 2021, any individual who wants to engage in swaps activity will have to satisfy NFA’s Swaps Proficiency Requirements prior to being approved as a swap AP at an FCM, IB, CPO or CTA Member or acting as an AP at an SD.

There are two proficiency tracks—a Long Track, which is designed for APs at SDs, and a Short Track, which is primarily designed for APs at FCMs, IBs, CPOs and CTAs. Some individuals acting as APs at SDs may perform more limited functions – these individuals are providef with a guidance on when an AP at an SD would adequately satisfy NFA’s Swaps Proficiency Requirements by completing the Short Track.

Each Track is module based and contains both a learning component and a testing component.

The Long Track consists of eight modules and a total of 100 test questions:

  • Swap Products and Applications (20 test questions)
  • Regulation of the Swaps Market (20 test questions)
  • Onboarding (10 test questions)
  • Transactional Disclosures (10 test questions)
  • Anti-Fraud and Ethical Practices (10 test questions)
  • Trade Execution/Clearing/Margin (10 test questions)
  • Risk Management (10 test questions)
  • Supervision (10 test questions)

The Short Track consists of four modules and a total of 60 test questions:

  • Swaps Products and Applications (20 test questions)
  • Regulation of the Swaps Market (20 test questions)
  • Supervision (10 test questions)
  • Compliance, Anti-Fraud, and Other Requirements (10 test questions)

The testing component of the modules is based solely on the content presented in the modules’ learning component. Therefore, there is no need for additional training or study guides to complete NFA’s Swaps Proficiency Requirements.

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