CFTC DSIO Interpretation: Family-Only LLCs Are Not a Commodity Pool under Rule 4.10 (with Lofchie Comment)

The Division of Swap Dealer and Intermediary Oversight issued an interpretation that a limited liability company whose members were two cousins was not a "commodity pool" within the meaning and intent of Regulation 4.10(d)(1) and, consequently, that the managing member could not be a CPO (as there was no pool of which he might be a CPO).

Lofchie Comment: While the result is good, this seems like a lot of regulatory effort to spend on a determination that two cousins co-investing are not a commodity pool. It would be a lot more efficient if the CFTC were simply to follow the SEC's definition of "family office" under the Advisers Act; that would save the CFTC a fair amount of regulatory resources and create some consistency between the CFTC and the SEC approaches.

See: CFTC Letter 12-27 Regulation 4.10(d)(1); Interpretation