The U.S. Commodity Futures Trading Commission (“CFTC”) recently released its long-awaited “Final Rule” to harmonize CFTC disclosure, reporting, and recordkeeping requirements with parallel U.S. Securities and Exchange Commission (“SEC”) requirements for registered investment advisers (“RIAs”) also required to register as commodity pool operators (“CPOs”) with respect to their operation of certain investment companies (“registered funds”) registered under the U.S. Investment Company Act of 1940 as amended (“1940 Act”). In the Final Rule, the CFTC substantially changed course from the Proposed Rule. In summary, the Final Rule is “grounded in the concept of substituted compliance” but is not without some additional operational obligations, and it does not address all issues related to this new “harmonized” regime.
The Final Rule’s simplified approach to CFTC disclosure, reporting, and recordkeeping obligations for registered fund CPOs is in stark contrast to the Proposed Rule, which had instead focused on removing existing barriers to duplicative disclosure and otherwise would have largely subjected registered fund CPOs to all of the same ongoing CFTC Part 4 CPO regulations as are applicable to CPOs of public commodity pools in addition to parallel obligations under the existing SEC regime...
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