Published

MFA Submits Letter to CFTC on CPO and CTA Registration and Compliance Requirements

On December 14th, MFA submitted a letter to the Commodity Futures Trading Commission (CFTC) on the CFTC’s proposed “Registration and Compliance Requirements for Commodity Pool Operators and Commodity Trading Advisors”. In the letter, MFA strongly supports the proposal and the CFTC’s decision to incorporate the relief provided by certain existing CFTC staff advisories, letters and, guidance into its part 4 regulations. In particular, MFA applauds the CFTC for codifying its relief related to the JOBS Act, which ensures that dually-registered CPOs and CTAs can engage in general solicitation and general advertisement with respect to the private offering of their commodity pools under 506(c) of Regulation D and the part 4 regulations. We also support the CFTC’s decision to codify the relief in CFTC Staff Advisory 18-96. However, we discuss two areas where additional clarification of Staff Advisory 18-96’s codification is necessary, and request that the CFTC clarify the following:

1. The process for disclosing statutory disqualifications when claiming a § 4.13 exemption, which process is important given the convergence of: (i) the breadth and ambiguity of sections 8a(2) and 8a(3) of the Commodity Exchange Act, (ii) the extension of the requirement to CPOs that have already claimed a § 4.13 exemption, and (iii) the potential for CPOs to have unintentional violations of which they are not aware at the time of violation; and
2. That it is the CFTC’s intention to allow market participants to be able to continue to rely on existing CFTC staff letters and guidance provided in relation to Staff Advisory 18-96 once that relief is incorporated into the final rules.
Lastly, in the letter, MFA requests that the CFTC adopt the relief for the books and records location requirement as codified in proposed § 4.23(a)(4).