On May 12, 2014, the staff of the Commodity Futures Trading Commission (CFTC) issued a letter setting forth the  criteria for seeking streamlined registration no-action relief for commodity pool operators (CPOs) who delegate their  status and responsibility as a CPO to another party. The letter clarified that no-action relief is required if a CPO seeks  to delegate its responsibilities to another party. While an investment adviser is deemed to be the CPO of a registered  investment company (RIC) that also is a commodity pool (and therefore delegation is not necessary), the same does  not apply to a wholly-owned subsidiary of a RIC. Each director of the wholly-owned subsidiary will likely have to seek  no-action relief to delegate their CPO status and responsibilities to the investment adviser to the wholly-owned  subsidiary. The CFTC staff’s letter details the criteria which must be satisfied in order for a delegating CPO to use the  streamlined process for relief. The relief is not self-executing and the delegating CPO (e.g., the directors) must  complete a form of no-action request and file such request with the CFTC, which the CFTC staff will review on an  expedited basis. If a delegating CPO does not qualify for the streamlined no-action relief, the CFTC staff will continue  to evaluate requests for CPO registration no-action relief on a non-expedited basis.

The CFTC staff letter is available at www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/14-69.pdf