United States: CFTC Grants Certain CPOs Relief From Registration And Reporting Requirements

The CFTC Division of Swap Dealer and Intermediary Oversight ("DSIO") granted exemptive relief to several commodity pool operators ("CPO") in response to requests for no-action relief related to certain CPO registration and reporting requirements under the Commodity Exchange Act.

No-action letters were issued in connection with criteria instituted by prior CFTC Letter 14-126, published in October 2014, which exempted certain persons from CPO registration requirements if they delegated CPO responsibilities to another person registered as a CPO. To qualify for relief under CFTC Letter 14-126, the "delegating CPO" and "designated CPO" were required to meet a series of nine criteria (see previous coverage). CFTC Letters 17-38, 17-39, 17-40, and 17-42 were issued in response to requests for relief for CPOs that met all criteria for exemption from registration except for criterion 6 ("If the Delegating CPO and the Designated CPO are each a non-natural person, then one such CPO controls, is controlled by, or is under common control with the other CPO."). The DSIO determined that the parties are "jointly and severally liable" for violations of the CEA and CFTC regulations. As a result, the DSIO decided that relief from registration requirements (under CEA Section 4m(1)) is justified.

In CFTC Letter 17-41, the DSIO granted exemptive relief from the annual report filing requirement for a certain pool that operates as part of a master-feeder structure pursuant to an exemption under CFTC Rule 4.7(b)(3) (see previous coverage of similar relief granted in May 2017). The relief allows the CPO to file a 14-month combined annual report (covering the period of January 1, 2016 to March 31, 2017) in lieu of the 4.7(b)(3) requirement that CPOs must distribute a report for each fiscal year within 90 days of (i) the end of the fiscal year or (ii) the date of permanent cessation of trading, whichever is earlier.

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