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CFTC Revises Registration and Reporting Requirements for CPOs and CTAs

Posted in CFTC Compliance, CFTC Enforcement

On February 9, 2012, the CFTC issued a final rule regarding changes to Part 4 of the CFTC’s regulations involving registration and compliance obligations for commodity pool operators (“CPO”) and commodity trading advisors (“CTA”).  Among other things, the rule rescinds the exemption from registration provided in Rule 4.13(a)(4) and sets forth additional annual reporting requirements for CPOs and CTAs.

Section 4.13(a)(4) exempted operators of private funds offered solely to sophisticated investors from registering as a CPO.  To qualify, the interests in the pool must have been exempt from registration under the Securities Act of 1933 and each participant must be a qualified eligible person or an accredited investor.  Now that the exemption has been rescinded, any private fund operating under the Rule 4.13(a)(4) exemption must register with the CFTC prior to December 31, 2012.

The CFTC also adopted Rule 4.27, which requires CPOs and CTAs to periodically report certain information.  CPOs and CTAs must annually file Form CPO-PQR and Form CTA-PR, respectively.  These forms are analogous to Form PF adopted by the SEC for reporting by registered investment advisors. 

Depending on the aggregate asset value of the CPO, CPOs must complete Schedules A, B and/or C of Form CPO-PQR.  A CPO with over $5 billion in assets as of June 30, 2012 must complete Schedules A, B, and C by November 29, 2012.  A CPO with over $1.5 billion in assets must complete Schedules A, B and C within 60 days after the first calendar quarter ending after December 14, 2012.  A CPO with between $150 million and $1.5 billion in aggregate assets must complete Schedules A and B within 90 days after December 31, 2012.  Finally, a CPO with under $150 million in assets must complete Schedule A within 90 days after December 31, 2012.

The reporting requirements become effective on July 2, 2012 and will apply to all registered CPOs.  Registered CTAs must file Form CTA-PR annually, within 45 days after a CTA’s fiscal year.  The first compliance date is February 14, 2013.