Private Fund Managers Must Renew CPO and CTA Exemptions by March 1

February 11, 2013


Private fund managers who claimed an exemption from registration with the Commodity Futures Trading Commission (“CFTC”) as commodity trading advisers (“CTAs”) and/or commodity pool operators (“CPOs”) in 2012 must affirm their claim by March 1, 2013.

Pursuant to changes stemming from the Dodd-Frank Act, private fund managers now are required to register or claim an exemption from registration with the CFTC as CPOs or CTAs because of their swap or other commodity-related activity. Many managers with limited swap or commodity-related activity are able to rely on the so-called de minimis exemption from registration found in CFTC Regulation 4.13(a)(3) for CPOs or the registration exemption in CFTC Regulation 4.14(a)(8) for CTAs.[1] CFTC regulations require such managers to annually affirm their continued reliance on the applicable exemptions.[2]

The affirmation process can be quickly completed by logging into the NFA’s Exemptions System.[3] Once logged into the system, users will be directed to the Exemption Index, in which exemptions and exclusions requiring affirmation will be identified with an icon in the “Affirm” column. After clicking on the icon, users will then be asked to confirm that the exemption or exclusion continues to be effective. The same process must be completed for each and every exemption on file that requires affirmation. Any CPO or CTA who fails to file the annual affirmation notice will be deemed to have requested a withdrawal of the applicable exemption or exclusion.

O’Melveny & Myers is available to advise private fund advisers, CPOs, and CTAs on their regulatory reporting obligations with the CFTC. For questions or additional information regarding regulatory obligations, please contact Heather Traeger at (202) 383-5232, Kris Easter at (202) 383-5364, or Matthew Cohen at (202) 383-5179.

[1] Fund managers also may have relied on CFTC Regulation 4.14(a)(10) for an exemption from CTA registration. This exemption is self-effecting, and a fund manager does not have to affirm the use of the exemption via the NFA’s Exemption System.
[2] Absent an exemption, fund managers must comply with Part 4 of the CFTC regulations. Part 4 governs the operation and activities of CPOs and CTAs, including the information that must be included in disclosure documents, account statements, and annual reports, the time frames within which they must be provided, and the specific records that must be maintained.
[3] The Exemption System can be accessed though http://www.nfa.futures.org/NFA-electronic-filings/exemptions.HTML#affirmation.


This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Heather Traeger, an O'Melveny partner licensed to practice law in the District of Columbia and Texas, Kris Easter, an O'Melveny counsel licensed to practice law in Texas, and Matthew Cohen, an O'Melveny associate licensed to practice law in the District of Columbia and California, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

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