CPO exemptions and exclusions

Mutual fund complexes relying on the exemption under Commodity Futures Trading Commission (“CFTC”) Regulation 4.5 from commodity pool operator (CPO) registration have to file:

(1) An initial notice of eligibility to claim that exemption; and

(2) An annual affirmation of continued reliance on the exemption within 60 days of each calendar year end.

In our experience, many mutual fund complexes “update” their Regulation 4.5 eligibility notices during the last two weeks of February.

This blog post is a reminder to clients and friends that the CFTC has recently amended its Regulation 4.5 to clarify that the registered investment adviser (the “RIA”) to a registered investment company is that company’s CPO.  This clarification will be of interest to any mutual fund complex that may have had an entity other than the RIA claim the CPO exemption with respect to the operation of a registered investment company.   


Continue Reading Mutual Fund Corner: A Reminder for Firms Updating CFTC Regulation 4.5 Exemptions – The Fund’s Adviser is Its CPO

On February 12th, the Division of Swap Dealer and Intermediary Oversight (the “Division”) of the United States Commodity Futures Trading Commission (“CFTC”) issued CFTC Letter No. 16-08.  This no-action letter clarifies that an intermediary located outside of the United States (a “Foreign Intermediary”) will not need to register as commodity pool operator (“CPO”), a commodity trading advisor (“CTA”), or an introducing broker (“IB”), as long as the following conditions are met:

  1. The Foreign Intermediary is located outside the United States; and
  2. The Foreign Intermediary acts only on behalf of  persons located outside the United States.

This posting provides additional information in respect of this no-action letter, which we expect will be of interest to non-U.S. hedge funds and investment advisers that use CFTC-regulated derivatives in connection with their investment strategies.
Continue Reading Attention Non-U.S. Funds and Advisers: Registration Exemption for Offshore CPOs, CTAs and IBs That Use Non-Cleared Derivatives

On January 15th, the National Futures Association (“NFA”) issued its Notice to Members I-15-02 (the “NTM”).

The NTM will be of interest to NFA Members, such as futures commission merchants (“FCMs”) and introducing brokers (“IBs”), and any entity in a mutual or hedge fund complex that has not yet affirmed its status for calendar year 2015 as:

  • an exempt commodity pool operator (“CPO”) under Commodity Futures Trading Commission (“CFTC”) Regulation 4.13(a)(1), 4.13(a)(2), 4.13(a)(3), or 4.13(a)(5);
  • an excluded CPO under CFTC Regulation 4.5; or
  • an exempt commodity trading advisor (“CTA”) under CFTC Regulation 4.14(a)(8).

These annual affirmations are due by March 2, 2015.

The remainder of this posting is an overview of the NTM, which is available here.


Continue Reading NFA Notice to Members I-15-02: Affirm CPO/CTA Exemptions and Exclusions by March 2nd, NFA Members Given Tools to Monitor Affirmations