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CFTC harmonization rules: CPOs of RICs benefit from “substituted compliance”

Daphne G. Frydman (Partner, based at Sutherland Asbill & Brennan LLP, Washington, DC, USA)
Raymond A. Ramirez (Associate, based at Sutherland Asbill & Brennan LLP, Washington, DC, USA)

Journal of Investment Compliance

ISSN: 1528-5812

Article publication date: 27 February 2014

70

Abstract

Purpose

To explain regulatory developments and changes to compliance obligations for asset managers registered with the Commodity Futures Trading Commission (CFTC) as commodity pool operators of registered investment companies.

Design/methodology/approach

Provides a general overview of new CFTC rules (Harmonization Rules) that afford relief to commodity pool operators of commodity pools that are registered as investment companies under the Investment Company Act of 1940; describes the specific CFTC disclosure, reporting and recordkeeping requirements that remain applicable to commodity pool operators that are also subject to Securities and Exchange Commission (SEC) regulation by virtue of operating commodity pools that are registered investment companies; discusses reliance on substituted compliance with applicable SEC requirements; outlines the method for claiming relief under the Harmonization Rules; provides guidance for CPOs of RICs that use controlled foreign corporations (CFCs).

Findings

CPOs of RICs benefit from “substituted compliance” under the CFTC Harmonization Rules.

Practical implications

Explains to investment advisers that have registered as CPOs of RICs the disclosure, reporting and recordkeeping obligations that apply to them, how to take advantage of compliance with SEC requirements in lieu of CFTC requirements, and how to claim relief with respect to certain CFTC compliance obligations.

Originality/value

Practical explanation by experienced derivatives and securities lawyers.

Keywords

Acknowledgements

This article is for informational purposes and is not intended to constitute legal advice. The views expressed by the authors are the authors' alone, and do not necessarily represent the views of Sutherland Asbill & Brennan LLP or our clients.

Citation

G. Frydman, D. and A. Ramirez, R. (2014), "CFTC harmonization rules: CPOs of RICs benefit from “substituted compliance”", Journal of Investment Compliance, Vol. 15 No. 1, pp. 17-24. https://doi.org/10.1108/JOIC-01-2014-0007

Publisher

:

Emerald Group Publishing Limited

Copyright © 2014, Authors

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