On September 6, the National Futures Association (NFA) filed with the Commodity Futures Trading Commission for approval an amendment to NFA Compliance Rule 2-46 (CPO and CTA Quarterly Reporting Requirements) and a proposed NFA Interpretive Notice NFA Compliance Rule 2-46: Reporting Financial Information on NFA Forms PQR and PR. NFA Compliance Rule 2-46 requires member commodity pool operators (CPOs) and commodity trading advisors (CTAs)(with reporting requirements under CFTC Regulation 4.27) to file NFA Forms PQR and PR, respectively, on a quarterly basis. Such forms collect general identifying information regarding member CPOs/CTAs in addition to specific information on the pools operated by such CPOs and the assets directed by such CTAs.

Under the proposed amendment and Interpretive Notice, member CPOs/CTAs would be required to disclose information relating to two additional ratios on the Form PQR and PR, respectively: (1) the Current Assets/Current Liabilities Ratio, which provides a measure of a firm’s liquidity; and (2) the Total Revenue/Total Expenses Ratio, which measures a firm’s operating margin. If adopted, NFA intends to use the new ratios to collect information about the financial condition of member CPOs/CTAs and identify firms that could be facing financial difficulties.

The proposed amendment is available here.