CFTC Issues No-Action Relief for University from CPO Registration Failure (CFTC Letter 14-29)

The CFTC Division of Swap Dealer and Intermediary Oversight ("DSIO") issued a no-action letter providing relief for a university ("University") from failing to register as a CPO under CEA Section 4m(1) ("Use of Mails or Other Means or Instrumentalities of Interstate Commerce by Commodity Trading Advisors and Commodity Pool Operators; Relation to Other Law").

In the letter, the CFTC stated that it will not recommend enforcement action against the University or any of its employees if the University offered, as part of its curriculum, a course that would allow University students to trade commodity interests through participation in a trading club ("Trading Club") offered in conjunction with enrollment in a University course ("Course").The DSIO had issued similar relief in 2010, providing relief to the University and the Trading Club. The DSIO is extending that relief on the condition that the Trading Club change certain criteria, which include:

• the Trading Club will be promoted and sponsored by the University and the Cooperative Extension Service;
• losses in excess of the pooled funds will be the responsibility of the University;
• enrollment in the Course is voluntary and is not a mandatory prerequisite for graduation or obtaining a degree; and
• operation of the Trading Club is consistent with the mission and objectives of the Cooperative State Research, Education and Extension Service of the United States Department of Agriculture.

See:CFTC Letter 14-29.