Client Alert

In 2012 the Commodity Futures Trading Commission significantly narrowed the CFTC Rule 4.5 exclusion from the definition of commodity pool operator available to operators of investment companies registered under the Investment Company Act of 1940.

There have recently been several developments related to the Rule 4.5 changes impacting CPOs operating RICs:

  • The National Futures Association issued a notice to members mandating a response from any CPO operating a commodity pool that is a RIC by February 15, 2013.
  • The Investment Company Institute, Investment Adviser Association, Managed Funds Association and Securities Industry and Financial Markets Association submitted a letter requesting that the CFTC grant relief to permit sponsors of RICs to net certain uncleared swaps held by a RIC when applying the net notional test under amended Rule 4.5.
  • The ICI and U.S. Chamber of Commerce appealed a federal district court’s decision rejecting the ICI and Chamber’s challenge to the amendments to Rule 4.5.

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