Alert November 19, 2013

NFA Requires Notice Filing from Registered Fund CPOs Reporting on a Consolidated Basis for Registered Fund Pools and Their Wholly-Owned CFC Subsidiaries under CFTC Relief No-Action Relief

The National Futures Association (the “NFA”) issued Notice to Members I-13-36 (the “NFA Notice”) which is directed at any commodity pool operator (“CPO”) of a registered investment company (a “RIC”) that has filed a notice with the CFTC claiming the relief provided under CFTC No-Action Letter 13-51.  In general terms, CFTC No‑Action Letter 13-51 allows the CPO of a RIC that trades commodity interests through a wholly-owned subsidiary (known as a controlled foreign corporations (“CFC”)) to report for the RIC and the CFC on a consolidated basis when complying with financial reporting requirements under CFTC Regulations 4.22(c) (Annual Report Filing with the NFA) and 4.27(c) (Reports on Form CPO-PQR).  CFTC No-Action Letter 13-51 is discussed in greater detail in the September 10, 2013 Financial Services Alert.  Under the NFA Notice, any CPO that has filed a notice of claim under CFTC No-Action Letter 13-51 must notify the NFA of the notice filing on or before December 31, 2013.   Prior to notifying the NFA of a notice filing, a CPO must ensure that the RIC and its related CFC(s) have been properly identified to the NFA through the Annual Questionnaire available on NFA's website.  Failure to notify the NFA of reliance on CFTC No‑Action Letter 13-51 will result in a CPO receiving calls for financial reports that may not be necessary.