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CFTC Staff Announces Expedited No-Action Relief for CPO (Commodity Pool Operators) Delegation

On May 12, 2014, the staff of the Commodity Futures Trading Commission (CFTC) issued a letter setting forth the criteria for seeking streamlined registration no-action relief for commodity pool operators (CPOs) who delegate their status and responsibility as a CPO to another party. The letter clarified that no-action relief is required if a CPO seeks to delegate its responsibilities to another party. While an investment adviser is deemed to be the CPO of a registered investment company (RIC) that also is a commodity pool (and therefore delegation is not necessary), the same does not apply to a wholly-owned subsidiary of a RIC. Each director of the wholly-owned subsidiary will likely have to seek no-action relief to delegate their CPO status and responsibilities to the investment adviser to the wholly-owned subsidiary. The CFTC staff’s letter details the criteria which must be satisfied in order for a delegating CPO to use the streamlined process for relief. The relief is not self-executing and the delegating CPO (e.g., the directors) must complete a form of no-action request and file such request with the CFTC, which the CFTC staff will review on an expedited basis. If a delegating CPO does not qualify for the streamlined no-action relief, the CFTC staff will continue to evaluate requests for CPO registration no-action relief on a non-expedited basis. 

The CFTC staff letter is available here.

© 2020 Vedder Price


About this Author

Vedder Price P.C. attorneys provide a full range of services to a diverse financial services clientele. Attorneys practicing in the firm’s Investment Services Group are experienced in all aspects of investment company and investment adviser securities regulations, broker-dealer regulatory and compliance matters, derivatives and financial product matters, and ERISA and tax matters. Clients include mutual fund complexes, hedge and other private funds, money managers, broker-dealers, independent directors, and many other types of institutions such as banks, savings and loans,...