COMMODITY FUTURES TRADING COMMISSION ADOPTS
REVISIONS TO RULE 4.7

Washington, D.C. – The Commodity Futures Trading Commission announced today that it has adopted both substantive and technical revisions to rule 4.7. This rule provides a simplified regulatory framework for commodity pool operators (CPOs) operating commodity pools consisting of certain highly accredited pool participants and for commodity trading advisors (CTAs) directing or guiding the commodity interest trading accounts of certain highly accredited clients. These persons formerly were termed "qualified eligible participants" (or QEPs) and "qualified eligible clients" (or QECs), respectively. Under revised rule 4.7, all such persons are termed "qualified eligible persons."

The substantive revisions make rule 4.7 available to more CPOs and CTAs in more situations. These changes add, among others, the following persons to the qualified eligible person definition: (1) principals of the registered investment professionals who themselves are defined as qualified eligible persons; (2) certain registered securities investment advisers and their principals; (3) "qualified purchasers" and "knowledgeable employees" as those terms are defined under the federal securities laws; (4) certain employees and agents of pools, CPOs and CTAs and certain of those employees’ and agents’ immediate family members; and, (5) trusts whose advisors and settlors are qualified eligible persons. In addition, the revisions make it easier for certain charitable organizations, trusts and collective investment vehicles to be qualified eligible persons and they include persons who are not "United States persons" in the qualified eligible person definition with respect to both rule 4.7 exempt pools and exempt accounts. Certain of the technical revisions, i.e., those which reorganize the rule, will facilitate implementation of the rule. Other technical revisions conform the nomenclature of the text to reflect the revised structure of the rule. The Commission has made similar conforming revisions to rules 30.6(b), 140.99(i)(A) and 180.3(b)(2)(vi), which prior to these revisions referred to, e.g., "qualified eligible participants" in their text.

The revisions to rule 4.7 were published in the Federal Register on August 4, 2000, Vol. 65, No. 151, p. 47848. In light of the breadth of the revisions, the Commission has included in the text of the release a distribution table that indicates where the provisions of the former rule can be found in the revised rule and a derivation table that indicates where the provisions of the revised rule can be found in the former rule.

A copy of the Commission’s Notice of Final Rulemaking can be obtained by contacting the Commission’s Office of Secretariat, Three Lafayette Centre, 1155 21^st St. N.W., Washington, D.C. 20581, (202) 418-5100. The Notice of Final Rulemaking also is available on the Commission’s website at http://www.cftc.gov/foia/fedreg00/foi000804b.htm