CPO Delegation Follow-up to CFTC Staff Letter 14-69

MFA submitted a letter to the CFTC staff requesting clarifications to CFTC Staff Letter 14-69 (the “Letter”), which establishes a streamlined process for receiving expedited no-action relief with respect to delegation of the CPO function by certain persons (“CPO Delegation”). The Letter sets out criteria that would allow certain persons, such as independent board directors of a fund, to apply through a standardized form for no-action relief from CPO registration by delegating the CPO function to a designated CPO. MFA is concerned that absent clarification, affiliated directors of a fund may not be able to use the expedited no-action relief process.

MFA’s letter requests that the CFTC staff clarify that:

  • Satisfaction of criteria 1a is not precluded where a Delegating CPO or the Designated CPO appoints one or more third parties to serve as investment manager(s) to the pool, provided that each such person who is engaged in providing commodity interest trading advice to the pool is registered as a CTA or is exempt from such registration pursuant to the Commodity Exchange Act and the CFTC’s regulations;
  • Satisfaction of criteria 1b is not precluded where the Delegating CPO is also an associated person of the Designated CPO, or exempt from registration as such, and the person participates in the solicitation of pool participants solely in such capacity; and,
  • Satisfaction of criteria 1c is not precluded where the Delegating CPO is also a principal or employee subject to supervision of either the Designated CPO or the CTA of the pool; provided that the person exercises these management responsibilities solely in his or her capacity as a principal or employee subject to supervision of the Designated CPO or the CTA, and not as a separate CPO or CTA of the pool.

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