The U.S. Commodity Futures Trading Commission (“CFTC”) has adopted a set of rule changes designed to assist the CFTC in overseeing the commodities and derivatives markets and assessing the market risk associated with pooled investment vehicles under its jurisdiction.1 In addition the CFTC has rescinded Rule 4.13(a)(4), an exemption from registration with the CFTC as a commodity pool operator (“CPO”) relied on by many non-U.S. operators of commodity pools like hedge funds and other types of “qualified purchaser” funds. However, the CFTC did not rescind the de minimis exemption provided in Rule 4.13(a)(3) as it had proposed to do.

The CFTC elected to rescind the Rule 4.13(a)(4) exemption for non-U.S. commodity pool operators and chose not to adopt an alternative exemption for non-U.S. commodity pool operators at this time. This was despite acknowledging that there had been significant comments arguing against this approach and acknowledging that the derivatives activities of non-U.S. commodity pool operators are often subject to the oversight of non-U.S. regulators. In support of its determination to proceed with the rescission and not to adopt an alternative exemption, the CTFC made only a brief explanation in the Adopting Release...

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