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CFTC Proposes Updating Forms to Enhance Integration of CPO Data Collection

Steven.Lofchie@cwt.com's picture
Commentary by Steven Lofchie

The CFTC proposed amending CFTC Rule 4.27 ("Additional reporting by commodity pool operators and commodity trading advisors") and Form CPO-PQR to enhance the integration of collected data on CPO activity.

According to the CFTC, the proposal would update Form CPO-PQR to modify the collection of data from certain registered CPOs and improve agency oversight of CPOs. Specifically, the proposal would:

  • (i) refocus data collected from CPOs relating to their operated commodity pools and (ii) update Form CPO-PQR to highlight the most useful data;

  • integrate data sets by adding questions to allow for the conjunctive use of data collected on Form CPO-PQR and other commodity interest market-related data; and

  • reduce unnecessary filing burdens on registrants by allowing CPOs to submit to NFA's Form PQR instead of the proposed, revised version of the CFTC's Form CPO-PQR.

CFTC Commissioner Statements

Chair Heath P. Tarbert stated that the amendments would help in "refining our approach to data collection" in addition to achieving more timely insights into CPO activities.

Commissioner Brian Quintenz supported the proposed elimination of certain questions on Form CPO-PQR, since they require firms to make "numerous underlying assumptions" and ultimately pose challenges for the CFTC in providing direct comparisons across the commodity pool industry.

Commissioner Dan M. Berkovitz supported steps toward improving procedures to aggregate and analyze data by requiring CPOs that engage in swap markets to report legal entity identifiers (or "LEIs").

Commissioner Rostin Behnam expressed concern, despite supporting the proposal overall, that amending Rule 4.27 could result in fewer data being collected on Form PF from CPOs that are dually registered in lieu of only requiring filings of the proposed revised Form CPO-PQR.

Commissioner Dawn D. Stump stated that the proposed revised Form CPO-PQR would be "better distinguished" in its function from Form PF and would reduce complexities.

Comments on the proposal must be submitted within 60 days following the CFTC's April 14, 2020 Open Meeting.

Commentary

The decision to redo the various forms intended to collect systemic risk data is completely sensible and seemingly overdue. (As previously considered, Form PF and its various spin-offs are worthless.) That said, now is not the time for the redo. Rather than adopt a rule change during a period when no one in the industry is likely to have an ability to focus on the details, which are important, this should be put on hold. Better to spend another year collecting useless data than to make revisions that don't really work. Plus, it would make sense to revise the SEC's Form PF in conjunction with the CFTC forms.

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