CFTC Registration Is Just the Beginning: Futures Compliance After NFA Notice 9083

Completing your CFTC registration and becoming a member of the National Futures Assoication (NFA) is a significant milestone, and the beginning of the real work, compliance. All too often Commodity Trading Advisors (CTAs) and Commodity Pool Operators (CPOs) are led to register without a sufficient understanding of the regulatory and compliance burdens they have just undertaken. This creates real regulatory risk that can lead to career ending enforcement actions.

In over 22 years of advising futures industry firms, I’ve seen too many new registrants breathe a sigh of relief after filing their forms, thinking the hard part is over. Unfortunately, they may be aided by well meaning compliance in a box firms and even lawyers that do not specialize or sufficiently understand the futures markets and what complying with NFA rules and regulations actually means. This can turn out poorly for their clients.

The truth is that registration is only the first step. The real compliance risk – both regulatory and reputational – comes from how your firm operates after you’re registered, not the act of registering itself. Maintaining diligent compliance in day-to-day business is where firms succeed or stumble. In fact, regulators like the NFA and CFTC pay close attention to your ongoing supervision, operations, and compliance culture once you have that registration in hand. Simply put: the license is the starting line, not the finish line.

Registration: Only the First Step, Not the Last

It’s easy to feel a sense of accomplishment after navigating the complex registration process. Becoming registered as an Introducing Broker (IB), Futures Commission Merchant (FCM), Commodity Pool Operator (CPO), or Commodity Trading Advisor (CTA) is no small feat. However, registration is just the beginning of your compliance journey, not the end. The real work begins on day two – when you must have already implement robust compliance procedures and supervision in your everyday operations, or be in a course to do so right away. This is where many firms unknowingly step into risky territory.

Remember that regulators expect you to “diligently supervise” your employees and agents in all aspects of your commodity interest business. That duty is ongoing and constant. A weak compliance program after registration can lead to regulatory scrutiny, enforcement actions, and damage to your firm’s reputation or worse. Reputational risk and regulatory risk skyrocket when compliance is lax post-registration. For example, failing to follow advertising rules, maintain proper records, or supervise associated persons (APs) can quickly trigger NFA audits or CFTC inquiries.

There are many vendors like law firms and compliance firms out there that can help. But a good compliance regulatory and compliance vendor will teach you what these rules mean so that you can understand them and implement them without confronting an NFA audit unprepared. In short, getting registered is just the tip of the iceberg, the real work comes afterwards. Not knowing this can have life altering consequences.

Be Careful with Vendors

One common misconception among newly registered firms is that they can outsource their compliance duties and thereby transfer the responsibility. It’s wise to seek help from experienced compliance professionals or attorneys, but hiring outside help does not absolve you of your own responsibility. You also have to be careful who you outsource these responsibilities to. It costs far less money to hire good compliance counsel in the beginning than pay for legal, compliance and accounting help to fix bad legal and compliance advice.

And all too often, this obligation is aided by firms and even lawyers that do not themselves have the specialized knowledge to responsibly guide their clients. Unfortunately, the barrier to entry to call oneself a futures compliance vendor is low and this means it is very easy to pick a lawyer or compliance vendor that may even give you errant advice.

You Cannot Outsource Liability - Interpretive Notice 9083

On 21 April 2025 the NFA filed Interpretive Notice 9083 under the Commodity Exchange Act’s ten‑day fast‑track provision. Because the CFTC has not stayed the filing, the notice will take effect as early as 1 May 2025. Notice 9083 overhauls 20-year-old NFA supervision guidance to cover modern electronic comms, remote APs, and heightened training.

Its language could not be plainer: every Member, including Commodity Trading Advisors (CTAs) and Commodity Pool Operators (CPOs), must adopt detailed, tested, and tailored written supervisory procedures or risk disciplinary action. The notice also warns that hiring outside counsel or compliance vendors does not shift responsibility; ultimate accountability remains with the registrant:

If a Member utilizes a Third-Party Service Provider, the Member remains responsible for complying with NFA and CFTC Requirements and may be subject to discipline if a Third-Party Service Provider's performance causes the Member to fail to comply with those NFA and CFTC Requirements. To mitigate the risks associated with outsourcing, a Member's written supervisory policies and procedures should detail its usage of a Third-Party Service Provider(s) to assist in supervising its APs' activities. Interpretive Notice 9083 § III(B)(3)

In other words, you cannot contract away your regulatory obligations - not to a consultant, not to a software vendor, not even to your attorney. If they give you wrong advice and I have seen this happen in something so fundamental to the futures industry like customer segregated funds, it is your responsibility.

It means that if you hire a compliance consulting firm or outside lawyer to set up your policies or perform internal audits, you must still actively oversee and validate those efforts. This is tough because it presupposes an understanding of a highly specialized body of knowledge sufficient to know if the law firm giving you bad advice is wrong. You cannot in some cases know what you do not know you do not know.

But if the third party makes a mistake or provides poor advice, the NFA will hold you, the registrant, accountable for the lapse. Your firm’s name is on the line. The regulators won’t accept “But my consultant/lawyer handled that” as an excuse. They expect you to exercise oversight over any third-party assistance, ensure that compliance tasks are being done correctly, and ultimately meet all regulatory requirements yourself. Ultimate responsibility cannot be outsourced. Interpretive Notice 9083 drives home this point so that firms understand: engaging help is fine, but abdication is not.

The Hidden Cost of Bad Advice

Over the years, I’ve often had firms walk into my office on the eve of CFTC investigations due to compliance failures. Frequently, these firms had relied on poor, incorrect, or negligent advice from others before finding their way to my firm. Some trusted an inexperienced compliance provider who gave them a cookie-cutter manual and called it a day. Others assumed another law firm with only passing futures knowledge had them covered. The outcome is sadly the same: the firm unknowingly operated out of compliance and got in trouble. By the time they seek out seasoned counsel, a fair amount of damage may already be done, and the cleanup is significantly costlier and more painful than if they had hired more experienced vendors in the first place.

The damage from bad compliance advice can be severe. Consider just a few potential consequences when guidance falls short or mistakes are made:

• Regulatory Enforcement Actions: fines, censures, or even suspension/revocation of registration.
• Reputational Harm: Clients and counterparties may lose trust when enforcement is public.
• Operational Disruption and Costs: emergency overhauls divert management attention and burn resources.
• Career-Altering Consequences: principals can face individual bars or long‑term supervisory restrictions…it is almost never the vendors.

In my experience, these scenarios often trace back to relying on the wrong help. Perhaps a firm was sold on a cheap compliance package or an unqualified advisor. Maybe they assumed all law firms or consultants are the same. Unfortunately, there is no rewind button for a compliance meltdown. Regulatory scars can take a long time to heal – if they heal at all. That’s why I caution: be extremely careful whose advice you trust with your new registrant firm’s future. It only takes one piece of bad advice to create a cascade of problems that could have been avoided.

Why Deep Experience Matters in Practice

Choosing experienced advisors who truly understand how the rules are applied in practice is a necessity. There is a world of difference between someone who merely fills out forms to get you registered, and someone who helps you build a living, breathing compliance program that is tailored for your business as it is and can scale with your business as it grows.

Compliance in practice is an art as much as a science. It requires judgment, foresight, and knowledge earned through years of navigating NFA exams and CFTC inquiries, and fixing problems caused by other vendors-qualities that inexperienced or discount providers often lack.

An inexperienced compliance service might think their job ends once they hand you a generic compliance manual and a stack of policies copied from elsewhere. But regulators can tell when a firm is operating on a “checkbox” compliance program. In fact, NFA officials can easily spot copied-and-pasted documents and know that these more often and then not fail to accurately reflect a firm’s specific practices. In plain terms: a one-size-fits-all manual isn’t going to cut it. Every firm has unique aspects, from its business model and trading strategies to its client profile and technology, and your compliance program should be tailored to fit your business realities. Off-the-shelf solutions can leave dangerous gaps.

Experienced compliance counsel will take the time to learn your business and customize advice accordingly. They should also want to educate you on the rationale and implementation of regulations-as your business changes and grows. They know which rules trip up firms like yours because they’ve seen it before. They can interpret grey areas and provide practical solutions that keep you within the lines and efficient in running your business. They stay up-to-date on regulatory developments (like new NFA notices or CFTC advisories) and adjust your compliance framework proactively.

In short, seasoned advisors bridge the gap between regulations on paper and compliance in practice. They won’t just register you and vanish – they will guide you in implementing procedures, training your staff, and preparing for the inevitable NFA audit down the road.

By contrast, less experienced advisors may not appreciate these nuances and they may not necessarily charge you less either. Some red flags are the focus only on initial registration paperwork and they simply hand over a templated manual, without ensuring you understand and can follow it. They might not foresee how seemingly small issues like unreviewed promotional pieces can blow up into a big problem especially when customers are losing money. When it comes to compliance, what you don’t know can hurt you. That’s why aligning with the right expertise from the beginning makes all the difference.

Protect Your Firm: The Stakes Are Too High

Regulators have little patience for firms that “didn’t know” or relied on canned solutions. The futures markets are heavily regulated and compliance in this industry requires highly specialized knowledge. The right advisor by your side can make all the difference in terms of lessening regulatory risk and protecting your business. Registration is just the beginning.

With Interpretive Notice 9083 becoming effective in days, newly registered CTAs , IBs, CPOs should act immediately.

If you are a newly registered fund in the digital asset space, you need counsel that has experience with compliance and audits in this area.

The Next Step: Expert Compliance Guidance

Registration was just the beginning , now let’s talk about what comes next. This firm specializes in exactly this phase: strategic compliance guidance and registration support for futures industry participants. We’ve helped firms like yours develop strong compliance programs before problems occur, and we’ve led many course-corrections when firms fell off track by following poor advice. Our approach is hands-on, tailored, and informed by decades of real-world experience with NFA, CFTC, and industry best practices.

De Silva Law Offices was founded by a former floor trader who later built a white‑collar defence practice and has spent 22 years advising futures firms on registration, compliance, and enforcement. That combination of hands‑on market experience, investigative insight, and deep regulatory know‑how, allows us to s proactively spot issues generic providers miss.

Whether you need outside general‑counsel support or dedicated outside compliance‑counsel services, we can build and maintain the supervisory framework that Notice 9083 demands. We can provide a candid assessment of your compliance needs, help implement robust supervisory procedures, and be the seasoned partner you need as you navigate the futures regulatory space-and keep you compliant as regulations evolve. If you have just registered, are about to register, or have discovered that “registration packages” left you exposed, let’s talk. Registration was just the beginning; together we can ensure your compliance journey is sound, defensible, and built to last.

R Tamara de Silva, Founding Attorney

tamara@desilvalawoffices.com

De Silva Law Offices, LLC

This article is provided for informational purposes and does not constitute legal advice.