CFTC clarifies and expands relief relating to delegation of commodity pool operator responsibilities

Abstract

Purpose

To explain CFTC No-Action Letter 14-126, issued on October 15, 2014 by the Commodity Futures Trading Commission Division of Swap Dealer and Intermediary Oversight, which sets forth a number of conditions with which a commodity pool operator (“CPO”) that delegates its CPO responsibilities (“Delegating CPO”) to a registered CPO (“Designated CPO”) must comply in order to take advantage of no-action relief from the requirement to register as a CPO.

Design/methodology/approach

Explains the modified conditions provided by Letter 14-126, including clarification of the permissible activities in which a Delegating CPO seeking to take advantage of registration no-action relief may engage regarding investment management, solicitation, and management of pool property; lists other criteria carried over from Letter 14-69 of May 12, 2014; provides analysis and discusses limitations of the relief provided by the CFTC No-Action letter.

Findings

The letter makes more liberal several of the conditions set forth in CFTC Letter 14-69 of May 12, 2014, with which many Delegating CPOs could not comply.

Originality/value

Practical guidance from experienced financial services lawyers.

Citation

Meer, C. and Patent, L.B. (2015), "CFTC clarifies and expands relief relating to delegation of commodity pool operator responsibilities", Journal of Investment Compliance, Vol. 16 No. 1, pp. 69-73. https://doi.org/10.1108/JOIC-01-2015-0011