Rules Relating to the Operations and Activities of Commodity Pool Operators and Commodity Trading Advisors and to Monthly Reporting by Futures Commission Merchants

The disclosure, filing, and recordkeeping requirements within part 4 of the Commission’s regulations were established to assist customers, to facilitate the Commission and the National Futures Association (NFA) in monitoring compliance with the part 4 rules, and to enable the Commission to better monitor the market risks posed by the Commission’s registrants, particularly commodity pool operators (CPOs) and commodity trading advisors (CTAs). Commission regulation 4.13 provides exemptions from CPO registration to certain persons and their commodity pools meeting the relevant conditions thereunder; Commission regulation 4.13(b)(1) generally requires as a condition of this exemptive relief that persons seeking to operate as exempt CPOs file a notice with the Commission. Through a recently adopted Final Rule, 85 Fed. Reg. 40877 (July 8, 2020), the Commission amended this notice filing to include an additional mandatory representation: that, subject to limited exceptions, neither the person nor any of its principals has in their backgrounds a statutory disqualification under Section 8a(2) of the Commodity Exchange Act (CEA) that would require disclosure, if such person sought registration with the Commission. The Commission expects this amended notice filing requirement to apply to all persons wishing to claim an exemption under Commission regulation 4.13, as well as those currently relying on one. This amendment to the notice filing was necessary to eliminate the inconsistent treatment of exempt CPOs as compared to registered CPOs (and the principals thereof), whereby certain persons could avoid the CEA’s basic conduct requirements established for all persons registering as intermediaries with the Commission, by claiming an exemption from CPO registration instead.

The latest form for Rules Relating to the Operations and Activities of Commodity Pool Operators and Commodity Trading Advisors and to Monthly Reporting by Futures Commission Merchants expires 2023-11-30 and can be found here.

Part-4 Commodity Pool Operators and Commodity Trading Advisors

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