Alert January 02, 2013

CFTC Issues No-Action Relief for Operators of Pools Investing in Legacy Securitization Vehicles

The CFTC’s Division of Swap Dealer and Intermediary Oversight (the “Division”) issued no-action relief for operators of pools invested in certain securitization vehicles formed prior to October 12, 2012 (a “legacy securitization vehicle”) that are addressed in no-action relief available under CFTC Staff Letter 12-45 (“Letter 12-45”) (discussed in the December 11, 2012 Financial Services Alert ).  The new no-action letter notes that Letter 12-45 only provided relief from the obligation to register as commodity pool operators (“CPOs”) to the operators of covered securitization vehicles, and did not address investors in such vehicles.  Accordingly, the new no-action letter provides that the Division will not recommend that the CFTC take enforcement action for failure to register as a CPO against the operator of a fund that invests in a legacy securitization vehicle whose operator is entitled to no-action relief under the terms of Letter 12-45, and who would not otherwise be required to register as a CPO.