CFTC Issues Final Rule Amending Registration and Compliance Obligationsfor Commodity Pool Operators and Commodity Trading Advisors...

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Also Issues a Proposed Rule to Harmonize Compliance Obligations for Registered Investment Companies Required to Register as Commodity Pool Operators

Derivatives Insight

On February 9, 2012, the CFTC adopted a final rule and proposed rule with respect to registration and compliance obligations for Commodity Pool Operators (CPOs) and Commodity Trading Advisors (CTAs). The final rule rescinds the exemption from registration under section 4.13(a)(4) of the Commodity Exchange Act (CEA) previously afforded to certain investment companies but reinstates a trading threshold which would exclude certain registered investment companies with de minimis trading activities from being required to register as a CPO; removes relief from certification requirements for annual reports provided to operators of certain commodity pools; requires annual filing of notices for claiming exemptive relief; and imposes new disclosure requirements for CPOs and CTAs. The rule was adopted on a 4-1 vote with Commissioner Sommers dissenting.

The proposed rule seeks to reduce the burden of new registration requirements for investment companies that are registered as private fund advisors with the SEC which, under the final rule, will now be required to register with the CFTC as well. The proposed rule would provide registered investment companies with relief from certain disclosure, reporting and recordkeeping requirements. Comments are due 60 days after publication in the Federal Register.

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Published In: Administrative Agency Updates, Business Organization Updates, Finance & Banking Updates, Securities Updates

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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