```

[Federal Register Volume 76, Number 96 (Wednesday, May 18, 2011)]
[Rules and Regulations]
[Pages 28641-28645]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-11551]

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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 4

RIN 3038-AC46

Commodity Pool Operators: Relief From Compliance With Certain 
Disclosure, Reporting and Recordkeeping Requirements for Registered 
CPOs of Commodity Pools Listed for Trading on a National Securities 
Exchange; CPO Registration Exemption for Certain Independent Directors 
or Trustees of These Commodity Pools

AGENCY: Commodity Futures Trading Commission.

ACTION: Final rule.

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SUMMARY: The Commodity Futures Trading Commission (Commission or CFTC) 
is adopting amendments to its regulations as they affect certain 
commodity pool operators (CPOs) of commodity pools whose units of 
participation are listed and traded on a national securities exchange 
(Amendments). Specifically, this action codifies the relief from 
certain disclosure, reporting, and recordkeeping requirements that 
Commission staff previously had issued to these CPOs on a case-by-case 
basis. It also codifies relief from the CPO registration requirement 
for certain independent directors or trustees of actively-managed 
commodity pools that Commission staff similarly has issued.

DATES: Effective date: June 17, 2011.

FOR FURTHER INFORMATION CONTACT: Christopher W. Cummings, Special 
Counsel, Division of Clearing and Intermediary Oversight, or Barbara S. 
Gold, Associate Director, Division of Clearing and Intermediary 
Oversight, Commodity Futures Trading Commission, 1155 21st Street, NW., 
Washington, DC 20581, telephone number: (202) 418-5450; facsimile 
number: (202) 418-5528; and electronic mail: ccummings@cftc.gov, or 
bgold@cftc.gov, respectively.

SUPPLEMENTARY INFORMATION: 

I. Background

    In order to make generally available the relief that Commission 
staff previously had issued on a case-by-case basis to individual CPOs 
of publicly-offered, exchange-listed pools, on September 9, 2010, the 
Commission published in the Federal Register proposed amendments to its 
Regulations 4.12 and 4.13 \1\ (Proposing Release).\2\ The Proposing 
Release commenced by explaining the history and background of the 
regulation of CPOs by the Commission under the Commodity Exchange Act 
(Act) \3\ and the background and development of various statutory and 
regulatory provisions granting relief from CPO regulation. With respect 
to this relief the Commission stated:

    \1\ 17 CFR 4.12 and 4.13. Commission regulations may be accessed 
through the Commission's Web site, at http://www.cftc.gov.
    \2\ 75 FR 54794.
    \3\ 7 U.S.C. 1 et seq. (2006), as amended by The Dodd Frank Wall 
Street Reform and Consumer Protection Act. Public Law 111-203, 124 
Stat. 1376 (2010). The Act similarly may be accessed through the 
Commission's Web site.
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    In implementing its statutory mandate to regulate the activities 
of CPOs, the Commission has endeavored to refine its regulations as 
appropriate to respond to changing market conditions in a manner 
consistent with customer protection. In addition to the issuance of 
relief by Commission staff on a case-by-case basis to facilitate 
application of regulatory requirements to new market conditions, the 
Commission has provided certain exemptions for registered CPOs from 
various of the requirements of Part 4 of its regulations, and where 
appropriate, it has provided exemptions from the CPO registration 
requirement itself.\4\

    \4\ 75 FR 54794.
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    The Proposing Release then went on to discuss the relatively recent 
development of publicly-offered commodity pools with units of 
participation listed on a national securities exchange (Commodity ETFs) 
\5\ and to describe the numerous similar requests for relief from CPOs 
of Commodity ETFs that Commission staff had received, and to which they 
had favorably responded (Prior Relief Letters).\6\ Because the requests 
for relief and the Prior Relief Letters the staff had issued in 
response thereto had become fairly standardized and routine, the 
Commission proposed to amend the relevant regulations so as to make the 
relief generally available to all CPOs who meet the requisite criteria.
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    \5\ See 75 FR 54794, at 54794-95. The Commission explained the 
origin and use of the term ``Commodity ETF''.
    \6\ Id. at 54795-96.
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    Thus, the Commission proposed adding new paragraph (c) to 
Regulation 4.12 that, subject to specified conditions, would permit the 
CPO of a Commodity ETF to claim relief from the specific Disclosure 
Document delivery and acknowledgment requirements of Regulation 4.21, 
the monthly Account Statement delivery requirement of Regulation 4.22, 
and the requirement to keep the CPO's books and records at its main 
business address in Regulation 4.23. In addition, the Commission 
proposed, subject to certain conditions, to exempt from CPO 
registration an independent director or trustee of a Commodity ETF, 
where that person was required to serve as a director or trustee solely 
for purposes of constituting and maintaining the audit committee 
required for actively-managed public companies (including actively-
managed Commodity ETFs) under provisions of the Sarbanes-Oxley Act of 
2002 \7\ (and Securities and Exchange Commission rules and exchange 
listing requirements adopted pursuant thereto) by adding new paragraph 
(a)(5) to Regulation 4.13.
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    \7\ Public Law 107-204, 116 Stat. 745, enacted July 30, 2002. 
See Section 10A(m) of the Securities Exchange Act of 1934 (Exchange 
Act), 78j-1(m) (2006), and Rule 10A-3 under the Exchange Act, 17 CFR 
240.10A-3 (2010).
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    As the Proposing Release explained, then, the Commission's actions 
were intended to respond to financial market developments in the 
limited context of CPOs whose units of participation in the pools they 
operated were listed for trading on a national securities exchange.\8\ 
The specific changes that the Commission proposed, as well as the 
rationale for those proposed changes, are set forth in the Proposing 
Release.\9\
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    \8\ 75 FR at 54795.
    \9\ See 75 FR at 54796-98.
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    In light of the generally favorable comments it received (discussed 
in Section II below), the Commission is adopting the Amendments 
essentially as proposed. In this regard, however, and

[[Page 28642]]

as the Commission stated in the Proposing Release, it is important to 
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note that:

    [R]egardless of registration status, all persons who come within 
the CPO definition are subject to certain operational and 
advertising requirements under Part 4, to all other provisions of 
the Act and the Commission's regulations prohibiting fraud that 
apply to CPOs, and to all other relevant provisions of the Act and 
the Commission's regulations that apply to all commodity interest 
market participants, such as the general antifraud provisions, 
prohibitions against manipulations, and the trade reporting 
requirements.\10\
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    \10\ 75 FR 54794 (footnotes omitted).

    Accordingly, while the regulations being published by this Federal 
Register release provide an exemption from registration for certain 
CPOs, these persons nonetheless remain subject to the Commission's 
jurisdiction.
    Consistent with past practice, in a separate document published 
elsewhere in today's Federal Register, the Commission is issuing a 
Notice and Order that authorizes the National Futures Association to 
process: (1) Claims of exemption from certain Part 4 requirements for 
CPOs with respect to Commodity ETFs; and (2) notices of exemption from 
registration as a CPO filed by independent directors or trustees of 
Commodity ETFs.

II. The Comments on the Proposing Release

    The Commission received five comment letters on the Proposing 
Release, as follows: Two from CPOs of Commodity ETFs; one from a 
registered futures association; one from a national securities 
exchange; and one from a bar association.\11\ The commenters were 
uniformly in support of the amendments to the Commission's regulations 
set forth in the Proposing Release. In the words of the registered 
futures association, for example, the proposed amendments would 
``provide the appropriate relief without materially impacting customer 
protection,'' and they would serve as an appropriate modification of 
the Commission's existing requirements by ``promot[ing] innovation in 
the marketplace.'' The national securities exchange provided similar 
comments, stating that the Proposing Release would ``provide[] 
appropriate regulatory relief in response to the developing financial 
marketplace consistent with the goal of customer protection.''
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    \11\ These comment letters are available on the Commission's Web 
site at: http://comments.cftc.gov/PublicComments/CommentList.aspx?id=761.
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    Commenters nonetheless requested certain clarifications and 
enhancements of the proposed amendments to the Commission's 
regulations.

A. Clarification of Relief From the Disclosure Document Delivery and 
Acknowledgment Requirements of Regulation 4.21

    Several commenters asked whether the Disclosure Document delivery 
and acknowledgment requirements would apply under proposed Regulation 
4.12(c) in various circumstances, including: Secondary market 
transactions not involving a direct purchase from the CPO; secondary 
market transactions not involving an underwriter or distributor; sales 
or resales by Authorized Participants;\12\ and purchases and resales of 
Commodity ETF shares by an underwriter or distributor.
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    \12\ In the case of many Commodity ETFs, one or more registered 
broker dealers (Authorized Participants) contract with the CPO to 
purchase or redeem large blocks of Commodity ETF units as necessary 
to ensure that the unit price and the Commodity ETF's net asset 
value do not diverge and create arbitrage opportunities. See e.g., 
CFTC Staff Letter 05-19 [2005-2007 Transfer Binder] Comm. Fut. L. 
Rep. (CCH) ]30,164 (Nov. 10, 2005).
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    As a general principle, the Commission believes that secondary 
market transactions to which a CPO or any person acting as the agent of 
the CPO is not a party do not trigger the requirement for the CPO to 
deliver a Disclosure Document or to obtain a signed acknowledgment of 
receipt.\13\ For a CPO of a Commodity ETF who has claimed an exemption 
under Regulation 4.12(c), the Disclosure Document delivery and 
acknowledgment requirements also do not apply in the case of 
transactions involving Authorized Participants or transactions 
involving the underwriters or distributors (acting as the CPO's agents) 
of the Commodity ETF's securities offering. Nevertheless, the CPO 
claiming relief under Regulation 4.12(c) is obligated to keep the 
Commodity ETF's Disclosure Document current and posted on the CPO's Web 
site, regardless of whether the CPO of the Commodity ETF has 
characterized its pool as an ``open-end'' or ``closed-end'' fund.\14\
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    \13\ See 44 FR 25658 (May 2, 1979), where in interpreting newly-
adopted Regulation 4.21 the Commission stated:
    The operator of a commodity pool is not required to provide a 
Disclosure Document [rule 4.21] to a person who purchases a unit of 
participation or interest in the pool from a pool participant if the 
pool operator did not solicit the purchase.
    \14\ See, e.g., CFTC Staff Letter 05-19 [2005-2007 Transfer 
Binder] Comm. Fut. L. Rep. (CCH) ] 30,164 (Nov. 10, 2005), where the 
CPO in making its request characterized its pool as an ``open end'' 
fund, and CFTC Staff Letter 10-06 [Current Transfer Binder] Comm. 
Fut. L. Rep. (CCH) ] 31,557 (Mar. 29, 2010), where the CPO 
characterized its pool as a ``closed-end'' fund.
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B. Requirement To Clearly Inform Prospective Participants of the CPO's 
Internet Web Site

    One commenter sought guidance on the requirement in proposed 
Regulation 4.12(c)(2)(i)(C) to``[c]learly inform prospective pool 
participants of the Internet address of such Web site'' on which the 
CPO has posted the Commodity ETF's Disclosure Document. The commenter 
pointed out that, in the context of a pool whose shares are traded on a 
national securities exchange, the CPO typically does not know the 
identities of many prospective pool participants.
    In response, the Commission has revised the text of Regulation 
4.12(c)(2)(i)(C) to make clear that the CPO is required to clearly 
inform those prospective pool participants with whom it has contact of 
the Web site address. Additionally, and as proposed, the regulation 
requires the CPO to direct brokers, dealers and other selling agents to 
so inform prospective pool participants. Based on the representations 
made by the CPOs to whom the Prior Relief Letters were issued, and the 
Commission's understanding of the Federal securities laws applicable to 
the sale of publicly-offered, exchange-listed securities, the 
Commission expects that persons will purchase shares in a Commodity ETF 
through a registered broker or dealer.

C. Request To Expand Relief From Regulation 4.22 To Include Annual 
Reports

    Another commenter asked that the CPO of a Commodity ETF claiming 
relief under proposed Regulation 4.12(c) be permitted to satisfy the 
Annual Report requirement under Regulation 4.22(c) by providing the 
Commodity ETF's Form 10-K on the same Web site where the CPO makes 
available the Commodity ETF's Disclosure Document and monthly Account 
Statements.
    The Commission did not include such an amendment to Regulation 4.22 
in the Proposing Release, and it is not including one in the 
Amendments. This is because the Commission believes that the benefits 
to Commodity ETF participants of a familiar, standardized, certified, 
annual report of the Commodity ETF's financial condition outweigh the 
burden of, for example, ascertaining the names and addresses of 
participants at year-end and preparing and delivering the Annual Report 
(all of which the CPO has 90 days to accomplish). Accordingly, the CPO 
of a Commodity ETF claiming exemption

[[Page 28643]]

under Regulation 4.12(c) remains subject to the Annual Report 
requirements of Regulation 4.22(c).\15\
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    \15\ Regulation 4.22(c) sets forth the basic requirement for 
distribution of the Annual Report. Regulations 4.22(d) through (i) 
contain additional provisions concerning the Annual Report, all of 
which remain applicable to the CPO.
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D. Filing Requirement for Statement by an Alternate Recordkeeper

    The Commission also received a comment recommending that instead of 
filing with the National Futures Association (NFA), as proposed, the 
statement required of an alternate recordkeeper by proposed Regulation 
4.12(c)((2)(iii)(C), the CPO should be required ``to maintain the 
statement as a business record and make it available to NFA'' upon 
NFA's request.
    In response, the Commission notes that the statement, whereby an 
alternate recordkeeper acknowledges its role, agrees to carry it out in 
compliance with Regulation 1.31, and agrees to keep the records it 
keeps open to inspection by Commission or Department of Justice 
representatives and available to pool participants, is a pre-requisite 
and condition precedent to effectiveness of relief from Regulation 
4.23. Moreover, if for some reason, the books and records kept at the 
CPO's main business address are unavailable, the statement would be 
inaccessible as well. Accordingly, the Commission is retaining the 
filing requirement of Regulation 4.12(c)(2)(iii)(C).

E. Clarification of Effect on Recipients of Prior Relief Letters

    In the Proposing Release the Commission stated that, after adoption 
of final regulations, a recipient of a Prior Relief Letter could 
continue to rely upon the Prior Relief Letter without taking any 
further action (such as filing a notice under Regulation 4.12(d)), so 
long as the requirements of the final regulations were no more 
restrictive than the requirements of the Prior Relief Letter to which 
the recipient was subject. One of the commenters asked for 
clarification of the words ``no more restrictive.''
    Inasmuch as the requirements of Regulations 4.12(c) and 4.13(a)(5) 
as adopted are no more restrictive than those of any of the Prior 
Relief Letters, by this Federal Register release the Commission 
confirms that each recipient of a Prior Relief Letter may continue to 
rely upon that letter without taking any further action. Nevertheless, 
and as the Commission stated in the Proposing Release:

    [I]f the facts and representations upon which a Prior Relief 
Letter was based materially change, the [recipient of that Prior 
Relief Letter] will be required to file a [n]otice under the final 
rule, or cease engaging in the activities that prompted the request 
for the Prior Relief Letter.\16\
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    \16\ 75 FR 54794, 54798.
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III. Related Matters

A. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) \17\ requires that agencies, 
in proposing rules, consider the impact of those rules on small 
businesses. The Commission has previously established certain 
definitions of ``small entities'' to be used by the Commission in 
evaluating the impact of its rules on such entities in accordance with 
the RFA.\18\ With respect to CPOs, the Commission has previously 
determined that a CPO is a small entity if it meets the criteria for 
exemption from registration under current Regulation 4.13(a)(2).\19\ 
Therefore, the requirements of the RFA do not apply to CPOs who do not 
meet those criteria. The Commission believes that the Amendments will 
not place any burdens, whether new or additional, on CPOs who would be 
affected hereunder. This is because the certain of the Amendments 
provide disclosure, reporting and recordkeeping relief for more CPOs, 
and another Amendment provides registration relief. The Commission did 
not receive any comments relative to its analysis of the RFA in the 
Proposing Release.
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    \17\ 5 U.S.C. 601 et seq.
    \18\ 47 FR 18618 (Apr. 30, 1982).
    \19\ Id. at 18619-20.
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    Therefore, the Chairman, on behalf of the Commission, hereby 
certifies, pursuant to 5 U.S.C. 605(b), that these regulations will not 
have a significant economic impact on a substantial number of small 
entities.

B. Paperwork Reduction Act

    The final rule affects information collection requirements. As 
required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), 
the Commission has submitted a copy of this section to the Office of 
Management and Budget for its review. The information collection 
burdens created by the Commission's proposed rules, which were 
discussed in detail in the Proposing Release, are identical to the 
collective information collection burdens of the final rules.
    The Commission invited the public and other Federal agencies to 
comment on any aspect of the information collection requirements 
discussed above. The Commission received no comment on its burden 
estimates or on any other aspect of the information collection 
requirements contained in its proposing release. The affected 
collection is Collection 3038-0005 (part 4 of the Commission's 
regulations).

C. Cost-Benefit Analysis

    Section 15(a) of the Act requires the Commission to consider the 
costs and benefits of its action before issuing a new regulation under 
the Act. By its terms, Section 15(a) does not require the Commission to 
quantify the costs and benefits of a new regulation or to determine 
whether the benefits of the proposed regulation outweigh its costs. 
Rather, Section 15(a) simply requires the Commission to ``consider the 
costs and benefits'' of its action.
    Section 15(a) further specifies that costs and benefits shall be 
evaluated in light of five broad areas of market and public concern: 
(1) Protection of market participants and the public; (2) efficiency, 
competitiveness, and financial integrity of futures markets; (3) price 
discovery; (4) sound risk management practices; and (5) other public 
interest considerations. Accordingly, the Commission could in its 
discretion give greater weight to any one of the five enumerated areas 
and could in its discretion determine that, notwithstanding its costs, 
a particular rule was necessary or appropriate to protect the public 
interest or to effectuate any of the provisions or to accomplish any of 
the purposes of the Act.
    The Commission has considered the costs and benefits of these new 
regulations in light of the specific provisions of Section 15(a) of the 
Act. The Commission has determined that the costs of the Amendments are 
not significant. While the Amendments are expected to lessen the burden 
that would otherwise be imposed upon CPOs of Commodity ETFs, market 
participants and members of the public will nonetheless be protected 
because any exemption of persons from regulatory requirements would be 
based on such factors as substituted compliance with other similar 
requirements. The Commission has determined that the benefits of the 
Amendments are substantial. The Amendments will promote efficiency in 
the markets by providing uniform standards for CPOs and by reducing 
duplicative regulation.
    The Commission requested comment on its application of these 
factors in the Proposing Release. No such comments were received.
    After considering the costs and benefits, the Commission has 
determined to adopt the Amendments.

[[Page 28644]]

List of Subjects in 17 CFR Part 4

    Advertising, Brokers, Commodity futures, Commodity pool operators, 
Commodity trading advisors, Consumer protection, Reporting and 
recordkeeping requirements.

    For the reasons presented above, the Commission hereby amends 
Chapter I of Title 17 of the Code of Federal Regulations as follows:

PART 4--COMMODITY POOL OPERATORS AND COMMODITY TRADING ADVISORS

0
1. The authority citation for part 4 continues to read as follows:

    Authority:  7 U.S.C. 1a, 2, 4, 6b, 6c, 6l, 6m, 6n, 6o, 12a and 
23

0
2. Section 4.12 is amended by:
0
a. Revising the heading of paragraph (b);
0
b. Revising the introductory text of paragraph (b)(1);
0
c. Amending paragraph (b)(2) by adding a heading;
0
d. Redesignating paragraphs (b)(3) through (b)(6) as paragraphs (d)(1) 
through (d)(4) and revising newly redesignated paragraphs (d)(1) 
introductory text, (d)(1)(iii)(A), (d)(1)(iii)(B), (d)(1)(iv), and 
(d)(2)(ii); and
0
e. Adding new paragraph (c), to read as follows:

Sec.  4.12  Exemption from provisions of part 4.

* * * * *
    (b) Exemption from Subpart B for certain commodity pool operators 
based on amount and nature of commodity interest trading. (1) 
Eligibility. Subject to compliance with the provisions of paragraph (d) 
of this section, any person who is registered as a commodity pool 
operator, or has applied for such registration, may claim any or all of 
the relief available under paragraph (b)(2) of this section if:
* * * * *
    (2) Relief available to pool operator. * * *
* * * * *
    (c) Exemption from Subpart B for certain commodity pool operators 
based on listing of pool participation units for trading on a national 
securities exchange. (1) Eligibility. Subject to compliance with the 
provisions of paragraph (d) of this section, any person who is 
registered as a commodity pool operator, or has applied for such 
registration, may claim any or all of the relief available under 
paragraph (c)(2) of this section if the units of participation in the 
pool for which it makes such claim:
    (i) Will be offered and sold pursuant to an effective registration 
statement under the Securities Act of 1933; and
    (ii) Will be listed for trading on a national securities exchange 
registered as such under the Securities Exchange Act of 1934.
    (2) Relief available to pool operator. The commodity pool operator 
of a pool whose units of participation meet the criteria of paragraph 
(c)(1) of this section may claim the following relief:
    (i) In the case of Sec.  4.21, exemption from the Disclosure 
Document delivery and acknowledgment requirements of that section, 
Provided, however, that the pool operator:
    (A) Cause the pool's Disclosure Document to be readily accessible 
on an Internet Web site maintained by the pool operator;
    (B) Cause the Disclosure Document to be kept current in accordance 
with the requirements of Sec.  4.26(a);
    (C) Clearly inform prospective pool participants with whom it has 
contact of the Internet address of such Web site and direct any broker, 
dealer or other selling agent to whom the pool operator sells units of 
participation in the pool to so inform prospective pool participants; 
and
    (D) Comply with all other requirements applicable to pool 
Disclosure Documents under Part 4. The pool operator may satisfy the 
requirement of Sec.  4.26(b) to attach to the Disclosure Document a 
copy of the pool's most current Account Statement and Annual Report if 
the pool operator makes such Account Statement and Annual Report 
readily accessible on an Internet Web site maintained by the pool 
operator.
    (ii) In the case of Sec.  4.22, exemption from the Account 
Statement distribution requirement of that section; Provided, however, 
that the pool operator:
    (A) Cause the pool's Account Statements, including the 
certification required by Sec.  4.22(h), to be readily accessible on an 
Internet Web site maintained by the pool operator within 30 calendar 
days after the last day of the applicable reporting period and 
continuing for a period of not less than 30 calendar days; and
    (B) Cause the Disclosure Document for the pool to clearly indicate:
    (1) That the information required to be included in the Account 
Statements will be readily accessible on an Internet Web site 
maintained by the pool operator; and
    (2) The Internet address of such Web site.
    (iii) In the case of Sec.  4.23, exemption from the requirement to 
keep the books and records specified by that section at the pool 
operator's main business office; Provided, however, that:
    (A) The books and records that the pool operator will not keep at 
its main business office will be maintained by one or more of the 
following: The pool's administrator, distributor or custodian, or a 
bank or registered broker or dealer acting in a similar capacity with 
respect to the pool;
    (B) At the time it files electronically with the National Futures 
Association the notice required under paragraph (d) of this section, 
the pool operator files a statement that:
    (1) Identifies the name, main business address, and main business 
telephone number of the person(s) who will be keeping required books 
and records in lieu of the pool operator;
    (2) Sets forth the name and telephone number of a contact for each 
person who will be keeping required books and records in lieu of the 
pool operator;
    (3) Specifies, by reference to the respective paragraph of Sec.  
4.23, the books and records that such person will be keeping; and
    (4) Contains representations from the pool operator that:
    (i) It will promptly amend the statement if the contact information 
or location of any of the books and records required to be kept by 
Sec.  4.23 changes, by identifying in such amendment the new location 
and any other information that has changed;
    (ii) It remains responsible for ensuring that all books and records 
required by Sec.  4.23 are kept in accordance with Sec.  1.31;
    (iii) Within forty-eight hours after a request by a representative 
of the Commission, it will obtain the original books and records from 
the location at which they are maintained, and provide them for 
inspection at the pool operator's main business office; Provided, 
however, that if the original books and records are permitted to be, 
and are maintained, at a location outside the United States, its 
territories or possessions, the pool operator will obtain and provide 
such original books and records for inspection at the pool operator's 
main business office within seventy-two hours of such a request; and
    (iv) It will disclose in the pool's Disclosure Document the 
location of its books and records that are required under Sec.  4.23.
    (C) At the time it files the notice required under paragraph (d) of 
this section, the pool operator files electronically with the National 
Futures Association a statement from each person who will be keeping 
required

[[Page 28645]]

books and records in lieu of the pool operator wherein such person:
    (1) Acknowledges that the pool operator intends that the person 
keep and maintain required pool books and records;
    (2) Agrees to keep and maintain such required books and records in 
accordance with Sec.  1.31 of this chapter; and
    (3) Agrees to keep such required books and records open to 
inspection by any representative of the Commission or the United States 
Justice Department in accordance with Sec.  1.31 of this chapter and to 
make such required books and records available to pool participants in 
accordance with Sec.  4.23 of this chapter.
* * * * *
    (d)(1) Notice of claim for exemption. Any registered commodity pool 
operator, or applicant for commodity pool operator registration, who 
desires to claim the relief available under paragraph (b) or (c) of 
this Sec.  4.12 must file electronically a claim of exemption with the 
National Futures Association through its electronic exemption filing 
system. Such claim must:
* * * * *
    (iii) * * *
    (A) The pool will be operated in compliance with paragraph 
(b)(1)(i) of this section and the pool operator will comply with the 
requirements of paragraph (b)(1)(ii) of this section; or
    (B) The pool will be operated in compliance with paragraph (c)(1) 
of this section;
    (iv) Specify the relief sought under paragraph (b)(2) or (c)(2) of 
this section, as the case may be, and
* * * * *
    (2)(i) * * *
    (ii) The claim of exemption shall be effective upon filing; 
Provided, however, That any exemption claimed hereunder:
    (A) Will not be effective unless and until the notice required by 
this paragraph (d) contains all information called for herein and any 
statements required under paragraph (c)(2)(iii) have been provided; and
    (B) Will cease to be effective upon any change which would render 
the representations made pursuant to paragraph (d)(1)(iii) of this 
section inaccurate or the continuation of such representations false or 
misleading.
* * * * *

0
3. Section 4.13 is amended by:
0
a. Removing the word ``or'' at the end of paragraph (a)(3)(iv);
0
b. Removing the period at the end of paragraph (a)(4)(ii)(B) and adding 
``; or'';
0
c. Redesignating paragraph (a)(5) as paragraph (a)(6), and revising 
newly redesignated paragraph (a)(6)(i) introductory text;
0
d. Adding new paragraph (a)(5); and
0
e. Revising paragraphs (b)(1)(ii) and (b)(2), to read as follows:

Sec.  4.13  Exemption from registration as a commodity pool operator.

* * * * *
    (a) * * *
    (5) The person is acting as a director or trustee with respect to a 
pool whose operator is registered as a commodity pool operator and is 
eligible to claim relief under Sec.  4.12(c) of this chapter, Provided, 
however, that:
    (i) The person acts in such capacity solely to comply with the 
requirements under section 10A of the Securities Exchange Act of 1934, 
as amended, and any Securities and Exchange Commission rules and 
exchange listing requirements adopted pursuant thereto, that the pool 
have an audit committee comprised exclusively of independent directors 
or trustees;
    (ii) The person has no power or authority to manage or control the 
operations or activities of the pool except as necessary to comply with 
such requirement; and
    (iii) The registered pool operator of the pool is and will be 
liable for any violation of the Act or the Commission's regulations by 
the person in connection with the person's serving as a director or 
trustee with respect to the pool.
    (6)(i) Eligibility for exemption under paragraph (a)(1), (a)(2), 
(a)(3) or (a)(4) of this section is subject to the person furnishing in 
written communication physically delivered or delivered through 
electronic transmission to each prospective participant in the pool: * 
* *
* * * * *
    (b)(1) * * *
    (ii) Contain the section number pursuant to which the operator is 
filing the notice (i.e., Sec.  4.13(a)(1), (a)(2), (a)(3), (a)(4) or 
(a)(5), or both (a)(3) and (a)(4)) and represent that the pool will be 
operated in accordance with the criteria of that paragraph or 
paragraphs; and
* * * * *
    (2) The person must file the notice by no later than the time that 
the pool operator delivers a subscription agreement for the pool to a 
prospective participant in the pool; Provided, however, that in the 
case of a claim for relief under Sec.  4.13(a)(5), the person must file 
the notice by the later of the effective date of the pool's 
registration statement under the Securities Act of 1933 or the date on 
which the person first becomes a director or trustee; and Provided, 
further, that where a person registered with the Commission as a 
commodity pool operator intends to withdraw from registration in order 
to claim exemption hereunder, the person must notify its pool's 
participants in written communication physically delivered or delivered 
through electronic transmission that it intends to withdraw from 
registration and claim the exemption, and it must provide each such 
participant with a right to redeem its interest in the pool prior to 
the person filing a notice of exemption from registration
* * * * *

    Issued in Washington, DC, on May 5, 2011, by the Commission.
David A. Stawick,
Secretary of the Commission.
[FR Doc. 2011-11551 Filed 5-17-11; 8:45 am]
BILLING CODE P
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