August 22, 2014

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CFTC Issues No-Action Relief from CPO Registration

The Division of Swap Dealer and Intermediary Oversight (DSIO) of the Commodity Futures Trading Commission issued three no-action letters granting relief from commodity pool operator (CPO) registration for operators of certain funds of funds, family offices and business development companies (BDCs). In the first letter, DSIO provided relief to any operator of a fund of funds that, among other things, does not know and could not have reasonably known that the fund’s indirect exposure to commodity interests exceeds the levels prescribed in CFTC Regulations 4.5 or 4.13(a)(3)(ii)(A) or (B). In order to obtain relief, an interested party must submit a claim to the CFTC prior to December 31, 2012. Such relief is available until the later of June 30, 2013, or six months after the DSIO issues revised guidance on de minimis calculation thresholds in Regulations 4.5 and 4.13(a)(3). The no-action letter regarding funds of funds is available here.

The second letter provides no-action relief to any operator of a family office, as defined by the Securities and Exchange Commission, if the eligible operator files for relief before December 31, 2012. The no-action letter regarding family offices is available here.

Pursuant to the third no-action letter, an operator of a BDC that is regulated by the SEC as such is also exempt from CPO registration under certain circumstances. An eligible operator of a BDC must file a claim with the CFTC before December 31, 2012, in order to obtain relief. The BDC no-action letter is available here.

©2014 Katten Muchin Rosenman LLP

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About this Author

Kenneth M. Rosenzweig, Katten Muchin Law Firm, Financial Institutions
Partner

Kenneth M. Rosenzweig focuses his practice on financial services matters, with an emphasis on the trading and clearing of financial instruments. Ken represents derivatives clearing organizations, designated contract markets and swap execution facilities, in addition to futures commission merchants, banks and other commercial participants in the exchange-traded and over-the-counter derivatives markets.

312-902-5381
James M. Brady, Katten Muchin Law Firm, Finance Attorney
Associate

James Brady concentrates his practice in financial services matters.

312-902-5362