The CFTC has eliminated the exemption from registration as a commodity pool operator, or CPO, set forth in CFTC Rule 4.13(a)(4). The Rule provided an exemption from CPO registration for the operators of commodity pools with sophisticated investors. As a result, some hedge fund advisors may be required to register as a CPO. The CFTC believes the risks outlined in the Dodd-Frank Act with respect to private funds are also applicable to commodity pools.
The CFTC retained an exemption set forth in Rule 4.13(a)(3) that the CFTC had previously proposed to eliminate. That Rule provides an exemption for certain de minimus trading in commodities.
Many advocated the CFTC adopt an exemption from registration as a CPO for family offices similar to the SEC family office exemption from registering as an investment adviser. The CFTC considered the suggestion but declined to adopt an exemption. The CFTC believes it does not have sufficient knowledge about family offices to adopt an exemption at this time.
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