CFTC Grants No-Action Relief from CPO/CTA Registration (CFTC Letter 16-07)

The CFTC Division of Swap Dealer and Intermediary Oversight ("DSIO") granted no-action relief from commodity pool operator ("CPO") and commodity trading advisor ("CTA") registration to the board of trustees of a pension plan group trust composed of two separate plans: a "qualifying entity" plan under CFTC Rule 4.5 (plan "B"), and a plan that was "not construed to be a pool" under the same CFTC rule (plan "C"). Plans B and C formed a group trust "A" in order to combine their assets for investment purposes. However, unlike plans B and C, A did not qualify as a "qualifying entity" under CFTC Rule 4.5. Although the CFTC rules provide an exclusion from the definitions of CPO and CTA to a trustee of a "qualifying entity," as described in CFTC Rule 4.5(b)(4) – i.e., a pension plan subject to Title I of ERISA – A was not eligible for this exclusion absent relief.

Under the relief granted by the DSIO, the Division will not recommend enforcement action, pursuant to CEA Section 4m(1) for failure to register with the Commission as a CPO or CTA, against any individual member of the Trustees with respect to their operation of A, provided that the Trustees operate and advise A in a manner that meets the conditions in CFTC Rules 4.5(c)(2) and 4.6.