NFA Sets Effective Date for Disclosure Requirements in Virtual Currency Activities

August 16, 2018

The National Futures Association (NFA) announced the effective date of its interpretive notice that establishes virtual currency disclosure requirements applicable to futures commission merchant, introducing broker, commodity pool operator, and commodity trading advisor member firms (Interpretive Notice). The Interpretive Notice will become effective on Wednesday, October 31, 2018.

NFA also provided the following additional dates and deadlines related to the Interpretive Notice:

For Futures Commission Merchants (FCMs) and Introducing Brokers (IBs):

  • Prior to November 30, 2018, FCM and IB member firms must provide the NFA Investor Advisory—Futures on Virtual Currencies Including Bitcoin—and the Commodity Futures Trading Commission (CFTC) Customer Advisory—Understand the Risk of Virtual Currency Trading—to any customer that has traded a virtual currency derivative
  • FCM and IB member firms engaging in any type of spot market virtual currency activity on or after October 31, 2018, must provide standardized disclosure language in the manner described in the Interpretive Notice and must also prominently display the disclosure language in any of its promotional material related to spot market virtual currencies

For Commodity Pool Operators (CPOs) and Commodity Trading Advisors (CTAs):

  • Any promotional materials on spot market virtual currency activities distributed or used by CPO and CTA member firms on or after October 31, 2018, must contain the prescribed disclosures described in the Interpretive Notice, in the manner described therein
  • Any offering documents currently in use by CPO and CTA member firms to solicit investors to engage in activities related to virtual currencies or virtual currency derivatives that do not satisfy the requirements of the Interpretive Notice must be updated such that they satisfy such requirements within 21 days of the effective date of the Interpretive Notice (November 21, 2018)
  • CPO and CTA member firms engaging in activities involving virtual currencies or virtual currency derivatives must provide updated disclosures addressing the requirements of the Interpretive Notice to existing investors by November 21, 2018. CPO and CTA member firms that update their disclosure documents in accordance with the Interpretive Notice likely will need to refile the amended disclosure documents with NFA, unless they are exempt from filing disclosure documents with NFA pursuant to Regulation 4.7[1]
  • Beginning October 31, 2018, CPO and CTA member firms engaged in such activity must also provide these updated disclosures to any solicited prospective investors before accepting an investment from such person  

New Promotional Material Filing System

NFA launched a new Promotional Material Filing System on August 14 to enable firms to seamlessly track their submissions throughout the review process, access correspondence and communicate with NFA reviewers, and view previously filed materials for reference. NFA hosted a webinar containing detailed descriptions of the new system, and will make available on its website the webinar video and transcript.

Please find NFA’s July 20 submission to the CFTC here, and the final Interpretive Notice here.


If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Steven M. Giordano
Stephen C. Tirrell
Katherine Dobson

Michael M. Philipp

Ethan W. Johnson 

Washington, DC
Laura E. Flores
Christopher D. Menconi
David A. Sirignano

[1] See, e.g., 17 CFR §§ 4.26, 4.36, 4.7.