On August 13, 2013, the Commodity Futures Trading Commission (the "CFTC") adopted final rule amendments to accept compliance with the disclosure, reporting and recordkeeping rules of the Securities and Exchange Commission (the "SEC") as substituted compliance for substantially all of Part 4 of the CFTC's Regulations, which is applicable to commodity pool operators ("CPOs") of funds registered as investment companies ("RICs") under the Investment Company Act of 1940, as amended. The adopting release widens the approach set forth in the harmonization proposals issued by the CFTC in February 2012 and provides, among other things, that if the CPO of a RIC satisfies all applicable SEC rules for such a fund as well as certain other conditions, the CPO will be deemed in compliance with certain CFTC rules. These rules cover: (1) delivery of disclosure documents to each prospective participant in any commodity pool that a CPO operates; (2) distribution of account statements to each participant in any commodity pool that a CPO operates; (3) provision of information that must appear in a CPO's disclosure document, including performance disclosures; and (4) the use, amendment and filing of disclosure documents. Although the harmonization rules provide relief for registered CPOs of RICs with respect to most of the compliance obligations under Part 4 of the CFTC's Regulations, the rules do not address all the requirements with which registered CPOs must comply. As a result, it is a good time now for CPOs, as well as commodity trader advisers ("CTAs"), to review the disclosure obligations under Part 4 of the CFTC's Regulations, as well as the rules regarding advertising materials. For more information, see our client alert, "Disclosure Requirements and Advertising Rules for CPOs," available at http://www.mofo.com/files/Uploads/Images/130920-Rules-for-CPOs.pdf.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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