CPO Registration Relief

In CFTC Letter 17-48, the Division of Swap Dealer and Intermediary Oversight (the “Division”) of the Commodity Futures Trading Commission (the “CFTC”) indicated that it would not recommend enforcement action against the manager of a oil and gas fund and its subsidiaries for failure to register as a commodity pool operator (“CPO”) or a commodity trading advisor (“CTA”).  As background, the manager intended to use over-the-counter swap transactions (“Swaps”) to hedge commodity price risks relating to oil and natural gas investments made by the fund and its subsidiaries (collectively, the “Fund”).  The following are the key facts presented in CFTC Letter 17-48:
Continue Reading CFTC Grants CPO/CTA No-Action Relief to Oil and Gas Fund and Its Operating Subsidiaries

In an October 15th letter, the CFTC’s Division of Swap Dealer and Intermediary Oversight (“DSIO”) issued self-executing no-action relief that allows a person to not register as a commodity pool operator (“CPO”), if that person (the “Delegating CPO”) delegates certain of their responsibilities as a CPO of a commodity pool to another person who is registered as a CPO (the “Designated CPO”) under applicable requirements of the Commodity Exchange Act (“CEA”).  The letter, which replaces CFTC Staff Letter No 14-69, will be of primary interest to the investment management community, since the letter allows the CPO of a private fund (such as the corporate general partner of a “hedge fund” organized as a limited partnership) to avoid CPO registration, if the following conditions are met.
Continue Reading CFTC Letter No. 14-126: CPO Registration Not Required, If Responsibilities Delegated to Registered CPO – Relief Self-Executing