CFTC Staff Announces Streamlined No-Action Relief Process for Certain CPOs

On May 12, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight announced a streamlined process that will allow a commodity pool operator (CPO) that has delegated investment management authority (Delegating CPO) to another person registered as a CPO (Designated CPO) to request no-action relief from CPO registration. To qualify for the streamlined approach, the Delegating CPO must submit a form no-action letter adopted by the CFTC pursuant to which the Delegating CPO represents that it will: (i) delegate all of its investment management authority to the Designated CPO; (ii) refrain from participating in the solicitation of participants for or managing any property of the commodity pool; (iii) not be subject to a statutory disqualification; (iv) be able to identify a business purpose (other than avoiding registration requirements) that explains why the Designated CPO is a separate entity; (v) ensure that the Designated CPO maintains books and records related to the commodity pool in accordance with CFTC regulations; (vi) control, be controlled by or be under common control with the Designated CPO; and (vii) enter into an agreement to be jointly and severally liable with the Designated CPO or be subject to liability as a board member of the commodity pool.  

The announcement and form of the streamlined no-action request letter are available here.


Topics:  CFTC, Commodity Pool, CPO, Financial Regulatory Reform, No-Action Relief

Published In: General Business 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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