“CFTC Proposes Removal of Certain Exemptions for Commodity Pool Operators and Heightened Reporting Standards”
The CFTC recently issued the Proposed Amendments and the Proposed Rules pursuant to its regulatory authority under the Commodity Exchange Act to implement Title VII of the Dodd-Frank Act. Under the Federal Register Notice, the compliance obligations of CPOs and CTAs, as set forth in the CFTC’s regulations, are being heightened in an effort to further the goals of the Dodd-Frank Act. Specifically, the Proposed Amendments would (i) modify the criteria for claiming relief under Section 4.5 of the CFTC’s regulations; (ii) reinstate the certification requirement for annual reports provided to operators of certain pools under Section 4.7 of the CFTC’s regulations; (iii) rescind the De Minimis and Sophisticated Investor Exemptions of the CFTC’s regulations; (iv) require the annual filing of notices claiming exemptive relief; and (v) set forth new risk disclosure requirements for CPOs and CTAs regarding swap transactions. The Proposed Rules would mandate that CPOs and CTAs registered solely with the CFTC report data relating to their respective pools on the Forms.
This Stroock Special Bulletin highlights the major provisions of the Federal Register Notice.