Commodity Futures Trading Commission 

 Office of Public Affairs 

 Three Lafayette Centre 

 1155 21st Street, NW 

 Washington, DC 20581 

 www.cftc.gov

Q & A – Reporting by Investment Advisers to Private Funds and Certain 

Commodity Pool Operators and Commodity Trading Advisors; and 

Amendments to Compliance Obligations of Commodity Pool 

Operators and Commodity Trading Advisors 

What is the goal of the proposed rulemaking? 

The notice of rulemaking issued jointly by the CFTC and SEC proposes to implement new statutory provisions 

enacted by Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) 

with respect to reporting by entities that are registered as investment advisers with the SEC and as commodity pool 

operators (CPOs) or commodity trading advisors (CTAs) with the CFTC. The CFTC is separately proposing 

related changes to CPO and CTA compliance obligations under its regulations. 

Who will be required to report under the proposed rules? 

CPOs and CTAs that advise private funds and are registered as investment advisers with the SEC will be required to 

file Form PF. All Form PF filers will file Section 1; only those with more than $1 billion in assets under 

management will file the more detailed information in Section 2 of Form PF. 

Will dually registered CPOs and CTAs have to make duplicative filings? 

The information reported through the various reporting forms is designed to be complementary, and not 

duplicative. For dually registered CPOs and CTAs, filing Form PF would be deemed a filing with both the SEC 

and CFTC. However, all private fund advisers that are also registered as CPOs and CTAs with the CFTC would be 

required to file Schedule A of proposed Form CPO-PQR (for CPOs) or Schedule A of proposed Form CTA-PR 

(for CTAs). Additionally, to the extent that they operate or advise commodity pools that do not satisfy the 

definition of “private fund” under the Dodd-Frank Act, private fund advisers that are also registered as CPOs or 

CTAs would still be required to file proposed Form CPO-PQR (for CPOs) and proposed Form CTA-PR (for 

CTAs), as applicable. 

For what purpose is the information in the reports being collected? 

Section 404 of the Dodd-Frank Act directs the SEC to require private fund advisers to maintain records and file 

reports containing such information as the SEC deems necessary and appropriate in the public interest and for 

investor protection or for the assessment of systemic risk. The records and reports must include a description of 

certain information about private funds, such as the amount of assets under management, use of leverage, 

counterparty credit risk exposure, and trading and investment positions for each private fund advised by the adviser. 

Information collected about private funds on Form PF, together with information the SEC collects on Form ADV 

and the information the CFTC separately has proposed CPOs file on Form CPO-PQR and CTAs file on Form 

CTA-PR, will provide the Commissions with important information about the basic operations and strategies of 

private funds and will be important in obtaining a baseline picture of potential systemic risk across the entire private 

fund industry. 

Commodity Futures Trading Commission ♦ Office of Public Affairs ♦ 202-418-5080 
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Commodity Futures Trading Commission ♦ Office of Public Affairs ♦ 202-418-5080 

Will the information be publicly available? 

Information reported to the SEC on Form ADV would be publicly available, whereas information reported on 

proposed Forms PF, CPO-PQR and CTA-PR would be confidential to the extent permitted under applicable law. 

Why is the Commission proposing to rescind the exemptions from CPO registration under 

Regulations 4.13(a)(3) and (4)? 

With the passage of the Dodd-Frank Act, the regulatory environment has changed from that which was in existence 

when Regulations 4.13(a)(3) and (a)(4) were promulgated in 2003. One of the primary purposes of the Dodd-Frank 

Act is to promote transparency with respect to the activities of participants in the financial markets. Sections 403 

and 404 of the Dodd-Frank Act generally require registration and reporting by investment advisers to private funds. 

Many private funds claim an exemption from SEC registration under sections 3(c)(1) and (7) of the Investment 

Company Act of 1940 (the “Investment Company Act”). The Dodd-Frank Act, although not rescinding these 

exemptions from registration under the Investment Company Act, requires the advisers of such funds to register 

with the SEC as “private fund investment advisers”. The Commission’s proposal seeks to eliminate the 

exemptions under Regulations 4.13(a)(3) and (4) for operators of pools that are similarly situated to private funds. 

It is the Commission’s view that the operators of these pools should be subject to similar regulatory obligations, 

including proposed Form CPO-PQR, in order to provide improved transparency and increased accountability with 

respect to these pools. The Commission has determined that it is appropriate to limit regulatory arbitrage through 

harmonization of the scope of its data collection with respect to pools that are similarly situated to private funds so 

that operators of such pools will not be able to avoid oversight by either the Commission or the SEC through 

claims of exemption under the Commission’s regulations. 

Why is the Commission proposing to reinstate trading criteria in Regulation 4.5? 

In 2010, the Commission became aware of certain registered investment companies that were offering series of de 

facto commodity pool interests claiming exclusion under Regulation 4.5. The Commission consulted with market 

participants and NFA regarding this practice. Following this consultation, NFA submitted a petition for rulemaking 

in which NFA suggested certain revisions to Regulation 4.5 with respect to registered investment companies. To 

stop the practice of registered investment companies offering futures-only investment products without 

Commission oversight, the Commission is proposing to amend Regulation 4.5 to reinstate the pre-2003 operating 

criteria consistent with the language proposed by NFA in its petition. The Commission sought comment on NFA’s 

petition and has included specific questions derived from those comments in its solicitation of comments on this 

proposal. 

What other changes are being proposed? 

The Commission is proposing two changes to Regulation 4.7, which currently makes available relief from certain 

disclosure, reporting and recordkeeping requirements to CPOs of pools that are offered solely to qualified eligible 

participants (QEPs): 

• The first proposal would remove exemptive relief from the certification requirement for financial statements 

in annual reports of Regulation 4.7-exempt pools. 

• The second proposal would modify the QEP qualification criteria to incorporate the SEC’s accredited 

investor standard by reference rather than by direct inclusion of its terms. Section 413 of the Dodd-Frank 

Act instructs the SEC to examine and adjust the threshold for “accredited investor” status under its 

regulations and initially increases the threshold amount so that it is significantly greater than the current 

provisions of Regulation D. Incorporation by reference will permit the Commission’s definition of QEP to 
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Commodity Futures Trading Commission ♦ Office of Public Affairs ♦ 202-418-5080 

continue to include the specific terms of the accredited investor standard in the event that it is later 

modified by the SEC without requiring the Commission to amend Regulation 4.7 each time to maintain 

parity. 

The Commission is proposing to require that all persons claiming exemptive or exclusionary relief under 

Regulations 4.5, 4.13, and 4.14 confirm their notice of claim of exemption or exclusion on an annual basis. This 

change will promote improved transparency regarding the number of entities either exempt or excluded from the 

Commission’s registration and compliance programs, which is consistent with one of the primary purposes of the 

Dodd-Frank Act. An annual notice requirement would enable the Commission to determine whether exemptions 

and exclusions should be modified, repealed, or maintained as part of the Commission’s ongoing assessment of its 

regulatory scheme. 

The Dodd-Frank Act expanded the scope of the Commission’s authority to include swaps. Accordingly, the 

Commission is proposing to amend the risk disclosure statement that must be included in CPO and CTA disclosure 

documents to describe certain risks specific to swap transactions.