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

Commodity Futures Trading Commission

Office of Public Affairs

Three Lafayette Centre

1155 21st Street, NW

Washington, DC 20581

www.cftc.gov

Q & A – Harmonization of Compliance Obligations for Registered Investment 

Companies Required to Register as Commodity Pool Operators

What is the goal of the proposed rulemaking?

The Commodity Futures Trading Commission (“Commission” or “CFTC”) is proposing amendments to its 

regulations regarding requirements applicable to certain investment companies registered under the Investment 

Company Act of 1940 (“registered investment companies”) whose advisors would be subject to registration as 

commodity pool operators due to changes to § 4.5 that the Commission is adopting by finalizing Commodity Pool 

Operators and Commodity Trading Advisors: Amendments to Compliance. The goal of these proposed 

amendments is to facilitate the compliance required of these entities.

Why are these changes being made?

A number of comments received regarding the changes to § 4.5 suggested that sponsors of investment companies 

registered with the Securities and Exchange Commission (“SEC”) which would also be required to register as 

CPOs under § 4.5 may be subject to duplicative, inconsistent, and possibly conflicting disclosure and reporting 

requirements.

Who will be affected by these changes?

These changes will affect those investment companies that are registered under the Investment Company Act of 

1940, with units of participation offered and sold pursuant to an effective registration statement under the Securities 

Act of 1933, and whose advisors would be subject to registration as a CPO due to changes to § 4.5.

What will change for those affected?

The Commission is proposing to amend § 4.12(c) such that the CPO of any pool whose units of participation will 

be offered and sold pursuant to an effective registration statement under the Securities Act of 1933 may claim the 

relief from the delivery and acknowledgement requirements under § 4.21, certain periodic financial reporting 

obligations under § 4.22, and the requirement that records be maintained at the CPO’s main office under § 4.23, 

available under § 4.12(c) with respect to that pool.

Specifically, the Proposal addresses the following areas: 

 The timing of the delivery of disclosure requirements;

 The requirement that a sponsor receive a signed acknowledgement of such disclosure requirements;

 The frequency of required updates for such disclosure requirement;

 The timing of financial reporting to participants;

 The requirement that a CPO maintain its books and records on site;

 The required disclosure of fees;
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Commodity Futures Trading Commission ♦ Office of Public Affairs ♦ 202-418-5080

 The required disclosure of past performance;

 The inclusion of mandatory certification language; and

 The SEC-permitted use of a summary prospectus

What questions are being asked of the public?

The Commission seeks comment on the following: 

 Do any provisions of part 4 in addition to those identified in the proposal need to be harmonized? 

 Should the Commission consider adopting a family offices exemption from CPO registration akin to the 

exemption adopted by the SEC? 

 What are the factors that weigh in favor or against such an exemption? 

 Do the proposed harmonization provisions for break-even analysis and performance disclosure strike the 

appropriate balance between achieving the Commission’s objective of providing material information to 

pool participants, and reducing duplicative or conflicting disclosure? 

 Should the Commission consider harmonizing its account statement reporting requirement with the SEC’s 

semiannual reporting requirement? 

 Should the Commission consider harmonizing its past performance reporting requirements with the SEC 

requirements? 

 Are there other approaches to harmonizing these requirements that the Commission should consider? 

 Should the Commission consider applying any of the harmonization provisions to operators of pools that 

are not registered investment companies?

 Are there potential costs associated with these harmonizing rules that the Commission has not considered? 

 Are there benefits to market participants, the public, or futures markets that the Commission should 

consider?