CFTC Staff Provides Registration Relief for Family Offices


On November 29, 2012, the Commodity Futures Trading Commission (“CFTC”) staff published relief for family offices that would otherwise be required to register with the CFTC as commodity pool operators (“CPOs”). This relief provides that the CFTC staff will not recommend enforcement action for failure to register with the CFTC against any CPO that meets the following requirements: (1) the CPO is a “family office” as defined by Rule 202(a)(11)(G)-1 of the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and (2) the CPO is and remains in compliance with Advisers Act Rule 202(a)(11)(G)-1, regardless of whether the CPO seeks to be excluded from the Advisers Act.

Historically, many family offices have relied on an exemption from CPO registration pursuant to CFTC Rule 4.13(a)(4). In February 2012, the CFTC promulgated certain amendments to Part 4 of the CFTC’s regulations, which included the rescission of the 4.13(a)(4) exemption. As a result of these amendments, family offices can no longer rely on the 4.13(a)(4) exemption after December 31, 2012, and absent this no-action relief, would be required to register as a CPO or rely on another registration exemption.

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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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