Public Statements & Remarks

Concurring Statement of Commissioner Rostin Behnam Regarding the Amendments to Compliance Requirements for Commodity Pool Operators and Form CPO-PQR

October 06, 2020

I respectfully concur with the Commodity Futures Trading Commission’s (the Commission or CFTC) issuance of today’s final rule (the Final Rule) amending Regulation 4.27 and Form CPO-PQR.  As a whole, the Final Rule provides a thoughtfully balanced and complete evaluation of the issues identified in the notice of proposed rulemaking[1] and the responsive comments.  Perhaps, just as importantly, the Final Rule clearly acknowledges that it is the first of several steps in the Commission’s ongoing assessment of Form CPO-PQR not only for its utility as a regulatory tool, but as a yardstick to measure improvements to the Commission’s data integration and analytical capabilities.  The Final Rule makes smart, targeted corrections without forgoing the possibility of future adjustments should the Commission later determine that additional data would support evolving regulatory initiatives or Financial Stability Oversight Counsel (FSOC) requirements to fulfill statutorily mandated duties and initiatives aimed at identifying and monitoring risks to financial stability.[2]

In determining to reduce the frequency and scope of commodity pool operator (CPO) data reporting and collection, the Commission is pivoting away from what was an ambitious vision for ongoing oversight, monitoring, and trend analysis inspired by the events and fallout of the 2008 financial crisis.[3]  To be sure, keeping pace with regulatory change and shifting priorities while exercising appropriate discipline in collecting, handling, and managing data is an endless endeavor.  Nevertheless, I am pleased with today’s outcome, and I am confident that as we continue moving forward, the tremendous abilities of the dedicated staff whose direct insight and experience informed our decisions will ensure we continue to act decisively in furthering our goals and supporting our mission critical duties.

The CFTC shares aspects of its regulatory initiatives, risk surveillance, and monitoring duties with respect to CPO and commodity pools with the Securities and Exchange Commission (SEC), the National Futures Association (NFA), and the FSOC.  The Final Rule in its detailed preamble identifies areas of overlap in which commenters suggested that the Commission ought to retreat from its proposed baseline for data collection in Revised Form CPO-PQR.  I am pleased that the Commission reasonably considered such comments and provides well-reasoned responses based on analysis of facts and data incorporated directly into the record.  While the Commission and its staff must always be prudent and judicious in our allocation of data, resources, authority, and deference in working amicably towards common goals, we should exercise great care so as to avoid sacrificing primacy and independence when acting directly in support of Congressional mandates and statutory directives.

I appreciate the Commission and its staff’s ongoing engagement with the SEC and FSOC, as well as with NFA, throughout the drafting of the NPRM and the Final Rule, and I am encouraged that discussions are ongoing.  As we move forward, it is my intention to ensure that the Commission provides staff the support and resources necessary to effectuate its current plans for Form CPO-PQR data and make future amendments and adjustments, as appropriate.


[1] Amendments to Compliance Requirements for Commodity Pool Operators on Form CPO-PQR, 85 FR 26378 (proposed May 4, 2020) (the NPRM).

[2] See NPRM, 85 FR at 26379.  Not only is the Commission among those agencies that could be asked to provide information necessary for the FSOC to perform its statutorily mandated duties, but the FSOC may issue recommendations to the Commission regarding more stringent regulation of financial activities that FSOC determines may create or increase systemic risk.  See Dodd-Frank Act §§ 112(d)(1), 120; See also Reporting by Investment Advisers to Private Funds and Certain Commodity Pool Operators and Commodity Trading Advisors on Form PF, 76 FR 71128, 71129 (Nov. 16, 2011); Commodity Pool Operators and Commodity Trading Advisors: Compliance Obligations, 77 FR 11252, 11253 (Feb. 24, 2012).

[3] See, e.g., NPRM, 85 FR at 26381.