Public Statements & Remarks

Statement of Support by Commissioner Brian D. Quintenz Regarding Amendments Prohibiting CPO Exemptions under Regulation 4.13 on Behalf of Persons Subject to Certain Statutory Disqualifications – Final Rule

June 04, 2020

I am pleased to support today’s final rule amending the procedures for certain commodity pool operators (CPOs) to claim an exemption from registration.[1]  It is sound policy to prevent a firm from claiming a registration exemption if the entity or its principals are “statutorily disqualified” under section 8a(2) of the Commodity Exchange Act, when the same disqualification would prevent them from registering with the Commission.  The disqualification applicable under today’s amendment covers some of the most serious offenses under the Act, including fraud.  While an exempt CPO is more limited in its activities than a registered CPO, for example, no pool has more than 15 participants[2] or the CPO’s commodity interest activity must remain below certain initial margin and notional amount thresholds,[3] an exempt CPO still manages money for the public.  I therefore agree with today’s amendment that the firm should be held to one of the most fundamental customer protection standards under the Commodity Exchange Act.

I thank the Commission’s staff for their work on this rulemaking, in particular for their thoughtful responses to issues that had been raised by commenters.


[1] Amended Commission regulation 4.13(b)(1)(iii) (17 CFR 4.13(b)(1)(iii)).

[2] Commission regulation 4.13(a)(2).

[3] Commission regulation 4.13(a)(3).