401(k) Plans—Potential Commodity Pool Issues in the United States

February 27, 2013

Under the rules of the Commodity Futures Trading Commission (“CFTC”), certain collective investment vehicles and other entities that, directly or indirectly, invest in “commodity interests”1 may be “commodity pools” whose sponsors or operators may be “commodity pool operators” (“CPOs”) subject to CFTC registration and regulation. “401(k)” and other similar retirement plans under which investments are made at the direction of participants and beneficiaries (“Participant-Directed Plans”) could, under certain circumstances, be considered to be commodity pools whose trustees, named or designated fiduciaries, or employer sponsors could be deemed to be CPOs subject to registration as such,2 unless (i) a notice of eligibility under CFTC Rule 4.5 is filed and then subsequently reaffirmed annually with the National Futures Association (“NFA”) claiming an exclusion from the definition of CPO and (ii) disclosure is made to plan participants and beneficiaries that such plan is being operated by a person claiming such exclusion.

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