FUTURES ASSOCIATION 

Via E-mail: secretarv@cftc.gov 

Mr. David Stawick 

Secretariat 

Commodity Futures Trading Commission 

Three Lafayette Centre 

1155 21st Street, NW 

Washington, DC 20581 

March 26, 2009 

COMMENT .; 

Received CFTC 

Record~ Section 

1(alo1o? 

Re: Commodity Pool Operator Periodic Account Statements 

and Annual Financial Reports- RIN 3038-AC38 

Dear Mr. Stawick: 

.. 

. ·.-

NFA supports the Commission's proposed changes to CPO reporting 

requirements relating to periodic account statements and annual financial reports. 

Although the number of CPO annual reports filed late has been significantly reduced in 

recent years, both the Commission and NFA continue to experience problems with 

CPOs not filing their annual reports within the required time frames. NFA believes the 

Commission's proposed changes will assist CPOs in complying with the Commission's 

requirements without sacrificing any customer protections. 

Although NFA supports the overall proposal, we recommend that the 

Commission consider certain modifications. Details of our recommendations follow. 

Waiver of Certified Annual Report from Participants in Liquidating Pool 

... . ··-·; 

CPOs of liquidating pools are often reluctant to prepare and file a certified 

annual report for the pool because the costs involved in preparing this report dilutes the 

assets that would otherwise be available for distribution to participants. NFA commends 

the Commission for recognizing this situation and proposing changes that will simplify 

the process for liquidating pools. NFA supports the Commission's proposed changes, 

but requests that the Commission consider a minor change with respect to the 

participant waiver requirement. 

Under the Commission's proposal, if the final report would otherwise be 

required to be certified, the CPO may prepare an unaudited annual report if it obtains, 

from each participant, a waiver of its right to receive the certified report from each 

participant and the CPO files those waivers with NFA. NFA does not see any benefit to 

requiring the CPO to file these waivers with NFA. Rather, NFA recommends that the 

300 South Riverside Plaza Suite 1800 Chicago, Illinois 60606 312.781.1300 800.621.3570 312.781.1672 fax www.nfa.futures.org 
Commission require that the CPO file a certification with NFA that it received a waiver 

from each participant. The CPO would also be required to produce the waivers to NFA 

upon request. NFA believes that this process will provide the same protections without 

burdening CPOs with the obligation of sending a copy of each waiver to NFA. 

Notice Regarding Final Distributions that Occur After Final Report Date 

NFA believes that the Commission's proposed amendment to 4.22(c) with 

respect to the due date of the final annual report of a liquidating pool will clear up the 

confusion with respect to the reference to two possible time frames. Again, however, 

NFA believes that the process can be streamlined without sacrificing any customer 

protections. Under the Commission's proposed amendment, a CPO that has not 

distributed all funds to participants by the date of the final report would be required to 

include information in the annual report about the return of the funds, including an 

estimate of the value of the funds remaining to be distributed and the anticipated time 

frame of when those funds are expected to be returned. Once the remaining funds are 

returned, the CPO would then be required to send a notice to all participants and to 

NFA. 

NFA believes the Commission can achieve the same objective without 

requiring CPOs to file a notice of final distribution with NFA. Rather, NFA recommends 

that any CPO that does not make the final distribution within the time frame outlined in 

the annual report be required to file notice of this fact with NFA, along with an 

explanation why the final distribution has not been completed. NFA will then 

periodically follow up with these CPOs to ensure that the final distribution is made. 

NFA believes this will be a more efficient and effective way for NFA to monitor CPOs 

that have not made the final distribution. 

Extension Provisions Under Regulation 4.22(f) 

The Commission's proposal also provides needed relief to funds of funds 

with respect to the deadline for filing annual reports. Under the current framework, a 

CPO of a fund of funds may claim up to an additional 60 days to distribute the pool's 

annual report by filing a notice containing specific representations with NFA. Those 

CPOs that are unable to file the annual report by the 60 day extended deadline may 

request an additional amount of time, up to 30 days, to file. Under the proposal, a CPO 

of a fund of funds may claim the entire 90 day extension by filing a single notice with 

NFA. Additionally, the Federal Register release states that extending the total period of 

time to file an annual report for funds of funds to 180 days "would eliminate the need for 

CPOs to file an additional request under CFTC Regulation 4.22(f)(1 ), and would reduce 

the administrative burden to NFA of processing these additional requests." 

NFA certainly agrees that lengthening the automatic extension for all 

funds of funds statements from 60 to 90 days will assist CPOs in meeting their filing 

deadlines. We also recognize that this change, however, will primarily benefit single tier 

300 South Riverside Plaza Suite 1800 Chicago, Illinois 60606 312.781.1300 800.621.3570 312.781.1672 fax www.nfa.futures.org 
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funds of funds. This change will provide little, if any, benefit to a multi-tiered fund of 

funds that must await statements from a last investee fund before it can prepare its own 

annual report. Therefore, NFA recommends that the Commission still permit CPOs 

operating multi-tiered funds of funds the ability to request pursuant to 4.22(f)(1) an 

additional amount of time, up to 30 days, to file their annual reports because in many 

cases the funds may not have received all the information needed to complete their 

annual reports within the 90 day extension period . 

The Commission's proposed changes provide much needed relief to 

CPOs while maintaining important customer protections. NFA requests, however, that 

the Commission consider the above noted modifications, which we believe will help 

ensure that CPOs are regulated in the most efficient and effective manner. 

If you have any questions on the proposed modifications, or would like to 

discuss them further, please do not hesitate to contact me. 

(caw:Comment Letter CPO Reporting Changes) 

Very truly yours, 

Thomas W. Sexton, Ill 

Senior Vice President and 

General Counsel 

300 South Riverside Plaza Suite 1800 Chicago, Illinois 60606 312.781.1300 800.621.3570 312.781.1672 fax www.nfa.futures.org