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Rescission of CFTC Regulation 4.13(a)(4) Commodity Pool Operator Exemption and Impact on Private Fund Managers

13 March 2012

On February 8, 2012, the Commodity Futures Trading Commission (“CFTC”) repealed the commodity pool operator (“CPO”) registration exemption widely used by the operators of private funds offered only to highly sophisticated investors (commonly called “qualified purchaser funds” or “Section 3(c)(7) Funds”). That exemption – which was set forth in CFTC Regulation 4.13(a)(4) – placed no limits upon the amount of commodity interest trading by such funds. At the same time, the CFTC voted to retain the CPO registration exemption in Regulation 4.13(a)(3) for operators of private funds that trade only a de minimis amount of commodity interests.

On March 13, the firm's New York office recently held a comprehensive CLE seminar on how these new regulatory developments will impact many private fund managers. Our panelists discussed and answered questions on the following topics, among others:

  • Effective date for rescission of CFTC Regulation 4.13(a)(4) and effect on the launch of new funds
  • Changes to CFTC Regulation 4.13(a)(3)
  • Registration as a CPO and/or a Commodity Trading Advisor ("CTA")
  • Other exemptions available, including those available to registered CPOs and CTAs
  • Forms CPO-PQR and CTA-PR

Panelists Included:

  • Beth R. Kramer (Introduction), Partner, K&L Gates New York
  • Jennifer Han, Associate General Counsel, Managed Funds Association
  • Cary J. Meer, Partner, K&L Gates Washington, D.C.
  • Lawrence B. Patent, Of Counsel, K&L Gates Washington, D.C.

To view a recording of the event please click here.

To download the presentation material, please click here.