On September 16, MFA filed with the CFTC comments to its proposed rulemaking concerning CPO Annual Report regulations.
In the letter, MFA supported the CFTC’s proposal to permit CPOs of certain non-U.S. pools to use the accounting principles, standards or practices followed in the U.K., Ireland, Luxembourg, and Canada when preparing the annual reports or periodic statements for such pools, in lieu of U.S. GAAP or IFRS. MFA also requested that the CFTC permit a CPO that uses IFRS, or will use one of the principles, standards or practices established in the U.K., Ireland, Luxembourg or Canada, with respect to a pool’s annual report and periodic account statement to use the same accounting principles when completing the financial information with respect to that pool on its Form CPO-PQR.
With respect to the CFTC’s proposed stub-year audit relief, MFA requested that the CFTC (i) measure the permissible stub-period based on when the pool commenced trading or, in the alternative, expand the permissible time period to six months from when the pool received subscription amounts from non-“insiders,” (ii) remove any limit on the amount of gross capital contributions or the number of participants in the pool or, if there must be a limit, increase the capital contributions limit to $6 million and require that the pool satisfy only either the contributions or participant limit and (iii) expand the category of “insiders” to include any entity that controls, is controlled by or is under common control with such “insiders” and, with respect to pools operated pursuant to Rule 4.7, knowledgeable employees and certain other “insiders” who are currently included in Rule 4.7.
Finally, MFA requested that the CFTC provide relief from the annual report audit requirement for pools whose only participants are the CPO and other “insiders.”
