Dechert Files a Comment Letter in Response to the CFTC’s Proposed Amendment to Certain Regulations affecting Registered and Exempt Commodity Pool Operators and Commodity Trading Advisors

December 17, 2018

On December 17, 2018, Dechert filed a comment letter in response to the CFTC’s proposed amendment to certain regulations affecting registered and exempt commodity pool operators (CPOs) and commodity trading advisors.  The proposals were a result of a CFTC’s agency-wide internal review of rules, regulations and practices to identify those areas that can be simplified to make them less burdensome and less costly.  Capitalizing on Dechert’s extensive practical experience advising different buy-side commodity market participants located both inside and outside the United States that would be affected by the proposals, the comment letter pointed out unintended cost burdens and operational consequences of the proposals and requested that the CFTC consider these in finalizing the rule changes.

Topics that the comment letter covered were the proposed codification and expansion of CFTC Staff Advisory 18-96, the proposed prohibition against a CPO relying on certain CPO registration exemptions under CFTC Rule 4.13 if it or its principals are subject to Commodity Exchange Act statutory disqualifications, the proposed change to CFTC Rule 4.13(a)(3) regarding participant qualification, the proposed change to CFTC Rule 4.5(a)(1) to identify the investment adviser as the excluded CPO with regard to the operation of a registered investment company, and the potential timing of the compliance dates for any rule changes.