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CFTC Approves Proposed Regulations for CPOs and CTAs

On October 9, the Commodity Futures Trading Commission approved proposed rules intended to simplify regulations for commodity pool operators (CPOs) and commodity trading advisors (CTAs) generally by codifying existing staff advisory and no-action letter relief and streamlining registration requirements for CPOs that operate in multiple jurisdictions.

Among other things, the rules propose to:

  • Permit pool operators to claim an exemption from CPO registration and compliance requirements with respect to offshore pools that have a limited nexus with the US (including by only soliciting and accepting funds from non-US persons), while maintaining their CPO registrations with respect to other pools (generally consistent with existing Advisory 18-96);

  • Allow US-based CPOs of offshore commodity pools with US participants to maintain the pool’s original books and records in the offshore location of the pool, as opposed to a US business location;

  • Codify no-action relief exempting CPOs and CTAs to “family offices” from registration with respect to investment management and advisory activities conducted on behalf of family clients;

  • Expand the exclusion from the CPO definition under CFTC Rule 4.5 to include advisers to business development companies, under circumstances consistent with the existing exclusion for advisers to registered investment companies;

  • Permit qualifying CPOs to engage in certain general solicitation activities with respect to their pool offerings, consistent with the Jumpstart Our Business Startups (JOBS) Act and prior no-action relief; and

  • Codify exemptive relief from the requirement to file Forms CPO-PQR or CTA-PR for CPOs or CTAs that do not otherwise have reporting obligations under Part 4 of the CFTC’s regulations.

The proposed rules would also prohibit certain statutorily disqualified persons from registering as a CPO or claiming an exemption from CPO registration, subject to limited exceptions.

Any comments on the proposed rules must be received by the CFTC within 60 days after the proposed rules are filed in the Federal Register.

The CFTC’s notice of proposed rulemaking is available here.

©2020 Katten Muchin Rosenman LLP


About this Author

Christian B. Hennion, Finance Attorney, Katten Muchin Law Firm

Christian B. Hennion concentrates his practice in financial services and asset management matters, including counseling fund managers, registered investment advisers and commodity trading advisors on both transactional and regulatory matters. Chris has advised a wide range of US and international managers, from start-ups to large institutions, regarding a variety of matters, including private fund launches and reorganizations, advisory engagements, Investment Advisers Act and Commodity Exchange Act compliance obligations, Securities and Exchange Commission (SEC) and Commodity Futures...


Timothy Kertland concentrates his practice on transactional, corporate and regulatory aspects of financial services matters. Timothy is able to provide legal services to a wide variety of clients including proprietary trading firms, hedge funds, broker-dealers, registered investment advisers, and commodity trading advisers.

While in law school, Timothy served as an editor of the Virginia Tax Review. As a first-year law student, he represented the University of Virginia School of Law at the National Transactional LawMeets Competition.