The Investment Company Institute (“ICI”) and the U.S. Chamber of Commerce (the “Chamber”) have filed a legal challenge to the CFTC’s final rule requiring that registered investment companies that transact in commodity futures and options must register with the CFTC as “commodity pool operators” (“CPOs”). The complaint alleges that the CFTC reached its decision to require CPO registration without satisfying the agency’s obligation to weigh the costs or benefits of the rule. Specifically, ICI and the Chamber charge that the CFTC’s Rule 4.5 amendment (which requires advisers to registered investment companies such as mutual funds, which are already regulated by the SEC, to be dually regulated by the CFTC as CPOs) violates the Commodity Exchange Act and the Administrative Procedure Act. The complaint also requests injunctive relief to prevent the CFTC from implementing the Rule 4.5 amendments adopted on February 24 of this year. For many registered investment companies, the amendments would limit their ability to use commodity interests, even as part of a hedging strategy, because they would no longer be exempt from CPO registration. Since dual regulation likely would raise a number of interpretive and operational issues for registered investment companies, a large number of registered investment companies may simply decide to exit the futures markets to avoid this dilemma. Additionally, as alleged in the complaint, market participants have grown increasingly concerned about the costs of such implementation. This current suit follows on the heels of a complaint filed last December by ISDA and SIFMA that challenged the CFTC’s position limit rules on similar cost-benefit grounds.