CFTC Grants Registration Relief to CPO/CTA of Affiliate Engaged in Hedging

The CFTC Division of Swap Dealer and Intermediary Oversight (the "Division") granted no-action relief from registration as a CPO or CTA to the investment manager of a fund. The relief was granted with respect to the investment manager's management of an affiliate that uses commodity interests to hedge exposure to the commodity price risks of its primary business.

The Division granted the relief based on the affiliate's representation that it is using commodity interests solely to hedge risks that are created as byproducts of its primary business activities, which involve its interests in crude oil and natural gas properties. In addition, the investment manager and affiliate said they will employ risk management policies and procedures to ensure compliance with the terms of the letter.