CFTC Staff Responds to FAQs Regarding Rescission/Modification of CPO/CTA Registration Exemptions


The Division of Swap Dealer and Intermediary Oversight (“DSIO”) of the Commodity Futures Trading Commission (“CFTC”) issued responses on August 14, 2012 to frequently asked questions (“FAQs”) submitted by several trade associations, the National Futures Association (“NFA”) and law firms in the wake of the CFTC’s amendments to its regulations governing commodity pool operators (“CPOs”) and commodity trading advisors (“CTAs”) adopted earlier this year. The FAQs address who must register as a CPO and an associated person (“AP”) of such CPO, how to comply with the remaining CPO registration exemption under CFTC Regulation 4.13(a)(3), and various transition and compliance date issues.

The CFTC amendments rescinded the CPO registration exemption for operators of private funds who limit their investors to highly sophisticated persons (and rescinded the related exemption for advisers to private funds) and modified the exclusion relied on by operators of registered investment companies (“RICs”) from registration as a CPO or CTA under CFTC Regulations 4.5, 4.13(a)(4) and 4.14(a)(8). When the amendments were adopted, the CFTC permitted CPOs and CTAs that filed exemption/exclusion notices in accordance with these regulations prior to the effective date of the rescission/modification, April 24, 2012, to continue to operate under the prior exemption/exclusion through December 31, 2012. For commodity pools created on or after April 24, 2012, however, the rescinded exemption and unmodified exclusion can no longer be claimed by operators or advisors of such pools. On July 13, 2012, DSIO issued a no-action letter that essentially extends the effective date of the exemption rescission and the modification of the exclusion for pools launched after the issuance of the letter until December 31, 2012.

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