NFA Notice I-13-26: Re Permissible and Impermissible Transactions Involving Pools with CPOs and Other Affiliates

The National Futures Association ("NFA") released a notice to members regarding Compliance Rule 2-45 ("Prohibition of Loans by Commodity Pools to CPOs and Affiliated Entities") and a related Interpretive Notice, "Prohibition of Loans by Commodity Pools to CPOs and Affiliated Entities." The amended Compliance Rule 2-45 and Interpretive Notice prohibit a Member CPO from permitting a commodity pool to use any means to make a direct or indirect loan or advance of pool assets to the CPO or any other affiliated person or entity. However, the Rule does not prohibit all financial transactions involving a pool and its control persons or affiliates. The Interpretative Notice largely provides examples of the types of transactions (e.g., securities loans, repos, prime brokerage arrangements) which involve pools that are not prohibited.

See: NFA's Notice to Members.See also: NFA Interpretive Notice.