The Commodity Futures Trading Commission has proposed amendments to its regulations relating to the content of periodic and annual reports by commodity pool operators (CPOs) to their investors. The amendments make a number of changes that affect pools operated by CPOs that are “fully registered,” as well as pools that are offered in reliance on the reporting, disclosure and recordkeeping exemptions provided by CFTC Regulation 4.7 (4.7 pools).  

Among the changes, the CFTC proposal would require the periodic account statements for 4.7 pools to disclose either the net asset value per outstanding participation unit or the total value of the applicable participant’s interest in the pool as of the end of the reporting period. The amendments also specify certain specific information that would be required to be included in the monthly, quarterly or annual reports for fully registered pools and 4.7 pools that have multiple series or classes of ownership interests. For fully registered and 4.7 pools that operate as funds-of-funds, the amendments increase the maximum extension period for filing and distributing annual reports from 60 to 90 days (for a total of 180 days) and codify prior CFTC staff positions on the reporting of investee fund fees and expenses to investors. Reporting requirements for fully registered and 4.7 pools that are liquidating would also be streamlined under the proposed amendments. A number of other CFTC staff positions on the proper accounting treatment and presentation of special allocations of ownership equity and the combined presentation of gains and losses for strategies involving both futures and related non-futures trading activities would be codified under the CFTC proposal, as would prior staff positions permitting offshore pools to prepare financial statements in accordance with International Financial Reporting Standards (IFRS), rather than U.S. generally accepted accounting principles, in certain circumstances. Finally, the CFTC proposal would remove the requirement that financial statements for pools that are operated by CPOs that are exempt from registration with the CFTC under Regulation 4.13 be prepared in accordance with U.S. GAAP.  

The comment period for the CFTC proposal expires on March 26.