CFTC Adopts Significant Changes to CPO and CTA Registration and Compliance Requirements


On February 9, the Commodity Futures Trading Commission adopted by a vote of 4 to 1 (Commissioner Sommers dissenting) final rules amending its Part 4 regulations governing commodity pool operators (CPOs) and commodity trading advisors (CTAs). As discussed at further length below, the amendments:

  • Rescind the exemption from CPO registration under CFTC Rule 4.13(a)(4) for CPOs of commodity pools offered solely to certain qualified eligible persons and institutional investors;
  • Adopt additional reporting obligations for registered CPOs and CTAs and new Forms CPO-PQR and CTA-PR under CFTC Rule 4.27;
  • Require the provision of certified, audited annual financial statements by registered CPOs relying upon the reporting relief provided under CFTC Rule 4.7;
  • Require additional risk disclosures regarding swap transactions in CPO/CTA disclosure documents that are required to be provided by registered CPOs and CTAs that are not relying on the disclosure exemptions provided by CFTC Rule 4.7;
  • Require annual affirmation of eligibility for exemptions and exclusions from CPO and CTA registration; and
  • Add limitations on futures and swaps trading by registered investment companies relying upon the exclusion from CPO registration set forth in CFTC Rule 4.5. (A second Client Advisory addressing the changes to Rule 4.5 will be published separately.)

Please see full advisory below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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