November 21, 2016

CFTC Unanimously Approves Final Rule Amendments to its Regulations Regarding CPO Financial Reports

Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC) announced today that it has unanimously approved amendments to its regulations applicable to the financial reports that commodity pool operators (CPOs) are required to provide on their pools’ operations. The amendments announced today incorporate into CFTC regulations relief that, to date, has been available through exemptive or no-action letters.

Among the amendments are provisions for the use of certain additional alternative generally accepted accounting principles, practices or standards in Annual Reports and periodic Account Statements – whether distributed as stated in CFTC Regulation 4.22 or 4.7 – and in Form CPO-PQR. The amendments also provide for “stub period” relief from the Annual Report audit requirement where the pool’s first fiscal year is four months or less and where, excluding insiders, the pool has had 15 or fewer participants who have contributed no more than $3 million. Further, the amendments provide an exemption from the Annual Report audit requirement for the CPO of a pool whose participants during a fiscal year are exclusively specified insiders who have a particularly close relationship with the pool’s operation (e.g., the CPO itself).

Finally, the amendments make clear that notwithstanding the availability of relief from the Annual Report audit requirement, a CPO must distribute an audited Annual Report at least once during the life of the pool. Detailed information regarding eligibility, notice and other requirements is available in the Federal Register notice announcing the amendments.

Last Updated: November 21, 2016