September 8, 2014

CFTC Staff Issues No-Action Letter for Commodity Pool Operators of Commodity Pools that are not Registered Investment Companies with Wholly-Owned Trading Subsidiaries

Washington, DC — The U.S. Commodity Futures Trading Commission’s (Commission) Division of Swap Dealer and Intermediary Oversight (DSIO) today issued a no-action letter for commodity pool operators (CPOs) of certain commodity pools that are non-registered investment companies (Parent Pools) that use wholly-owned trading subsidiaries to trade commodity interests (Trading Subsidiaries). In the letter, DSIO does not recommend that the Commission take an enforcement action against a CPO for failure to provide the following:

• A separate annual report for a Parent Pool’s Trading Subsidiary to the National Futures Association (NFA) pursuant to Commission regulation 4.7(b) or 4.22(c), as applicable; and
  
  
• A separate CPO-PQR report for a Parent Pool’s Trading Subsidiary to NFA pursuant to Commission regulation 4.27(c).

This relief is dependent on:

• The CPO of the Parent Pool being the CPO of the Trading Subsidiary;
  
  
• The exposure to the Trading Subsidiary by the participants in its Parent Pool being shared pro rata;
  
  
• The CPO consolidating the reporting under Commission regulation 4.7(b) or 4.22(c), as applicable, and Commission regulation 4.27(c) for the Trading Subsidiary with those of its Parent Pool; and
  
  
• The CPO claiming the relief through notice
  
  

DSIO has previously issued similar relief to CPOs of registered investment companies that utilize controlled foreign corporations in CFTC Staff Letter No. 13-51. This letter essentially expands the class of commodity pools for which a CPO may consolidate annual reports and CPO-PQR reports.

Last Updated: September 8, 2014