In two interpretive letters issued on October 11, 2012 (collectively, the “Interpretive Letters”), the Division of Swap Dealers and Intermediary Oversight (the “Division”) of the Commodity Futures Trading Commission (the “CFTC”) gave guidance as to which securitization vehicles (each hereinafter, an “SV”) and which real estate investment trusts (each hereinafter, a “REIT”) may enter into swaps and yet fall outside of the definition of “commodity pool” under the Commodity Exchange Act (the “CEA”) as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”).

The possibility that REITs and SVs might be characterized as commodity pools arises primarily because Dodd-Frank amended the definition of “commodity pool” to include enterprises that are operated for the purpose of trading in swaps. Historical guidance as to what constitutes a “commodity pool” is somewhat sparse. However, whether or not an enterprise may constitute a commodity pool by reason of its entering into derivatives may matter a great deal to the enterprise and persons associated with it because, among other things...

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