CFTC Sets Comment Deadline for Proposal Limiting Eligibility of QEPs for CPOs
The CFTC set a comment deadline of December 11, 2023 for a proposal that would (i) raise the amount of money required to invest in funds under CFTC Rule 4.7 ("Exemption from certain part 4 requirements for commodity pool operators with respect to offerings to qualified eligible persons . . .") and (ii) increase the disclosure requirements applicable to such funds. The proposal was published in the Federal Register.
As previously covered, under the Proposal the CFTC would:
- amend the QEP definition to increase the financial thresholds requirement and reflect inflation by doubling the portfolio requirements to $4,000,000;
- establish minimum content requirements for CPOs'/CTAs' QEPs' disclosure, promotional and advertising-related practices for operating pools and trading programs and require CPOs and CTAs to retain business records of the disclosures;
- codify "routinely granted" exempted requests, allowing CPOs to distribute monthly, as opposed to quarterly, account statements for their "Fund of Funds" pools; and
- make several technical amendments consistent with the proposed changes.