RegAlert2019-05-23 | CFTC Staff Letter 19-12Added · Updated
CFTC Staff Letter 19-12: No-Action Relief from CPO Registration for General Partner of SPE
The Division of Swap Dealer and Intermediary Oversight will not recommend an enforcement action against entity A for failing to register as a commodity pool operator under section 4m(1) of the Commodity Exchange Act in its role as general partner of special purpose entity B. This relief applies because the funds investing in B are exempt from registration under Commission regulation 4.13(a)(3), audited financial statements are voluntarily distributed to investors, and regulatory information regarding B's commodity interests is captured through the registered operator of the underlying fund N. The decision relies on the confluence of factors including common control among the entities, legitimate business reasons for the structure, and the absence of additional disclosure requirements for fund investors.
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CFTC Letter No. 19-12 No-Action May 23, 2019
U.S. COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
1155 21st Street, NW, Washington, DC 20581
Telephone: (202) 418-5000
Division of Swap Dealer and
Intermediary Oversight
Matthew B. Kulkin
Director
May 23, 2019
Re: Request for No-Action Relief from the Requirement to Register as a Commodity Pool Operator under Section 4m(1) of the Commodity Exchange Act Dear :
This is in response to your letter dated October 5, 2018 to the Division of Swap Dealer and Intermediary Oversight (“Division”) of the Commodity Futures Trading Commission (“Commission”). In the letter, you request on behalf of “A” that the Division not recommend to the Commission an enforcement action against “A” for failing to register as a commodity pool operator (“CPO”) pursuant to section 4m(1) of the Commodity Exchange Act (“Act”) 1 in connection with its role as the general partner of “B”. Background Based on the representations made in your letter and other correspondence (“Correspondence”), we understand the structure involving “B” to be as follows. “B” is a part of a fund complex (“Fund Complex”) 2 that consists of seven private investment funds (“Funds,” each, a “Fund”) 3 that generally invest in parallel. 4 The primary rationale for creating parallel funds was to accommodate investors that had different tax, regulatory, or other sensitivities. 5
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Source: Commodity Futures Trading Commission — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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