CFTC Issues CPO Registration Relief to Entity Acting as Directed Trustee (CFTC Letter 14-146)

The CFTC issued a no-action letter providing relief from commodity pool operator ("CPO") registration to an entity acting as a "directed trustee" of a state-regulated trust.

According to the letter, the "directed trustee" generally may act only on a "directed" basis, as instructed by the trust's investment manager. The directed trustee's discretionary powers are limited to matters relating to the custody of the trust's assets, the payment of certain fees, expenses and reimbursements out of the trust assets, and the engagement of certain agents and service providers on behalf of the trust. The relief is provided on the condition that the investment manager of the trust is registered as a CPO with CFTC and has primary responsibility for the operation of the trust, including marketing and trading activities, as well as the hiring and firing of the directed trustee.

See: CFTC Letter 14-146.