On September 3, 2014, the US Commodity Futures Trading Commission’s (“CFTC”) Division of Swap Dealer and Intermediary Oversight (“DSIO”) issued a no-action letter for commodity pool operators (“CPOs”) of certain commodity pools that are non-registered investment companies (“Parent Pools”) and that use wholly-owned trading subsidiaries to trade commodity interests (“Trading Subsidiaries”). In cases where CPOs do not provide a separate annual report for a Parent Pool’s Trading Subsidiary to the National Futures Association (“NFA”) (pursuant to CFTC regulation 4.7(b) or 4.22(c), as applicable) or a separate CPO-PQR report for a Parent Pool’s Trading Subsidiary to NFA (pursuant to CFTC regulation 4.27(c)), the DSIO recommends that the CFTC not take an enforcement action so long as (i) the CPO of the Parent Pool is the CPO of the Trading Subsidiary; (ii) the exposure to the Trading Subsidiary by the participants in its Parent Pool is being shared pro rata; (iii) the CPO is consolidating the reports for the Trading Subsidiary with those of its Parent Pool; and (iv) the CPO is claiming the relief through notice.

The full CFTC staff letter is available at:

http://www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/14-112.pdf.