CFTC Grants Exemptive Relief to Certain CPOs from Annual Reporting Requirements (CFTC Letters 16-47, 16-48 and 16-49)
The CFTC granted exemptive relief to various commodity pool operators ("CPOs") from having to (i) file and distribute annual reports, (ii) have an independent public accountant audit the financial statements in such reports and (iii) prepare a Form CPO-PQR report and file it with the NFA.
In CFTC Letter 16-47, the CFTC granted exemptive relief from annual audit and Form CPO-PQR reporting requirements to the CPO of a three-level master-feeder fund complex involving a Master Fund, a Feeder Fund and an Intermediate Fund operated pursuant to CFTC Rule 4.7.
Specifically, the CFTC granted exemptive relief to the CPO from:
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filing an audited annual report on the Feeder Fund with the NFA and distributing it to the participants of the Intermediate Fund; and
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filing a Form CPO-PQR for the Intermediate Fund with the NFA concerning the directed assets of that Fund under the advisement of the CPO.
The CFTC noted that this relief allows the CPO to prepare a single audited annual report and Form CPO-PQR at the Feeder Fund-level for both the Feeder Fund and the Intermediate Fund.
In addition, CFTC Letters 16-48 and 16-49 granted exemptive relief: (i) to the CPO of three pools in a master-feeder fund arrangement that began operations at the end of September 2015 from providing annual reports for fiscal year 2015; and (ii) to the CPO of a pool with two investors that permanently ceased trading in March 2016 from providing an annual report for fiscal year 2015.
The CFTC stipulated that each CPO, respectively, must provide an annual report that covers (i) the period from the inception of trading in September 2015 to December 31, 2016, after the end of fiscal year 2016 (CFTC Letter 16-48), and (ii) the period from January 1, 2015 to March 31, 2016 (CFTC Letter 16-49), within 90 calendar days after the pool ceased trading. The CFTC noted that both CPOs have provided waivers from all of the participants in their respective pool(s).