Introduction & Overview
On December 19, 2025, the Market Participants Division (“MPD”) of the Commodities Futures Trading Commission (“CFTC”) issued No-Action Letter No. 25-50, granting interim relief for certain commodity pool operators (“CPOs”) registered with the Securities and Exchange Commission (“SEC”) as investment advisers. As a general matter, the interim relief exempts such CPOs from registration with the CFTC in respect of certain of their commodity pools, so long as such pool’s corresponding interests are exclusively offered to “qualified eligible persons” as defined in CFTC regulation 4.7(a)(6) (“QEPs”). Accordingly, this relief has the effect of reinstating the exemption under CFTC regulation 4.13(a)(4) (the “QEP Exemption”), which the CFTC had rescinded in 2012, subject to key additional conditions detailed below. The relief will expire when the CFTC promulgates rules addressing the reinstatement of the QEP Exemption or publicly determines not to promulgate such rules.
Background
The original QEP Exemption provided that CPOs of privately-offered funds operating as commodity pools were exempt from registration with the CFTC if investors in such funds were limited to: (a) in the case of natural persons, QEPs, and (b) in the case of non-natural persons, certain categories of “accredited investors” as defined in Regulation D of the Securities Act of 1933 (the “Securities Act”). Because the definition for QEP includes “qualified purchasers” as defined under the Investment Company Act of 1940 (“Investment Company Act”), most CPOs operating a fund that relied on the 3(c)(7) exemption under the Investment Company Act could automatically qualify for the QEP Exemption.
The No-Action Letter
The relief provides that the MPD will not recommend that the CFTC commence any enforcement action against any CPO that either (a) fails to register with the CFTC as a CPO, or (b) withdraws from registration with the CFTC as a CPO, subject to the following conditions:
- The CPO is currently, or would be, until such time as the CFTC promulgates regulations to reinstate the QEP Exemption, required to be registered with the CFTC as a CPO for its commodity pool operations, or relies upon an existing exemption from such CPO registration in CFTC regulation 4.13;
- The CPO is registered with the SEC as an investment adviser;
- The interests of the pool operated by the CPO are exempt from registration under the Securities Act and sold without marketing to the public in the United States;
- The CPO reasonably believes at the time of investment, or at the time of relying on the no-action position from CPO registration, that each pool participant qualifies as a QEP;
- The CPO files a Form PF with the SEC with respect to the pool(s) covered by the no-action position; and
- The CPO files a notice with the CFTC documenting reliance on the no-action position.
Any CPO that satisfies the above conditions may also withdraw its registration as a commodity trading adviser (“CTA”) with the CFTC solely with respect to the pools for which the CPO relies on the no-action position. The relief under the no-action letter will continue in effect until such time that the CFTC either completes formal rulemaking to reinstate the QEP Exemption or determines not to adopt such rules. Importantly, the relief provides that CPOs opting to deregister would not need to comply with CFTC regulation 4.13(e)(2), requiring CPOs to offer to their investor’s automatic redemption rights in respect of such commodity pools that are subject to deregistration.
Takeaway & Analysis
Notably, the relief is limited to CPOs that (a) are registered investment advisors, (b) file a Form PF with the SEC, and (c) report information on Form PF about the relevant pools for which the CPO is seeking no-action relief, each a condition that was not required under the original QEP Exemption. Accordingly, certain advisers that advise pools not reported on Form PF would not be able to claim relief for such pools. In addition, the no-action letter does not provide relief from CTA registration, unless the CTA is also the CPO of the relevant commodity pool for which no-action relief is claimed. Accordingly, registered CTAs that advise commodity pools with a third-party CPO and/or separately managed accounts will need to remain registered as a CTA.
CPOs should discuss with their attorneys whether their commodity pools are covered by the no-action relief and if deregistration with the CFTC is desired at this time.
