CFTC Expands Class of Commodity Pools Which May Consolidate Annual Reports
On September 8th, the CFTC’s Division of Swap Dealer and Intermediary Oversight issued a no-action letter for commodity pool operators of certain commodity pools that are non-registered investment companies (Parent Pools) that use wholly-owned trading subsidiaries to trade commodity interests (Trading Subsidiaries). DSIO will not recommend enforcement action against a CPO for failure to provide: a separate annual report for a Parent Pool’s Trading Subsidiary to the National Futures Association; or a separate CPO-PQR report for a Parent Pool’s Trading Subsidiary to NFA. The relief is dependent on the CPO of the Parent Pool being the CPO of the Trading Subsidiary; the exposure to the Trading Subsidiary by the participants in its Parent Pool being shared pro rata; the CPO consolidating the reporting under Commission regulation 4.7(b) or 4.22(c), as applicable, and Commission regulation 4.27(c) for the Trading Subsidiary with those of its Parent Pool; and the CPO claiming the relief through notice. This letter essentially expands the class of commodity pools for which a CPO may consolidate annual reports and CPO-PQR reports. CFTC Press Release.
CFTC May Address End-User Concerns
On September 5th, the Bloomberg reported the CFTC may expand its end-user exemptions for position limits in certain agricultural and energy derivatives. Limited Review.
CFTC Will Permit Commodity Hedge Funds to Advertise in Public Media
On September 10th, the CFTC announced its decision to allow its own regulated funds to advertise publicly, following the JOBS Act’s requirement that the SEC allow private funds to do so. Private commodity pool funds may also advertise, but must first file a notice with the CFTC before taking advantage of the new regulations. Funds.
CFTC Sends ISDAfix Findings to Justice Department
On September 8th, the CFTC announced that it has submitted evidence of a possible criminal manipulation of the ISDAfix benchmark to the Justice Department. This action follows a round of subpoenas sent by the agency to the world’s largest banks to determine whether ISDAfix was in fact rate-rigged. The Fix.
Zulutrade Ordered to Pay $150,000 Penalty
On September 9th, the CFTC announced that it has brought (and subsequently settled) charges against Greece- based broker Zulutrade, Inc., asserting that the company failed to adequately oversee procedures for screening accountholders from OFAC-targeted companies. Zulutrade will pay $150,000 in penalties and $80,000 in commissions and fees earned from accounts related to the charges. Penalty.