CFTC Provides No-Action Relief to CPOs from Reporting Requirements (CFTC Letters 14-56 and 14-57) (with Lofchie Comment)

The CFTC Division of Swap Dealer and Intermediary Oversight ("DSIO") issued two no-action letters to the CPOs of commodity pools regarding annual report filing requirements.

In Letter 14-56, the DSIO provided exemptions from CFTC Rule 4.7(b)(3) ("Exemption from Certain Part 4 Requirements for Commodity Pool Operators with Respect to Offerings to Qualified Eligible Persons and for Commodity Trading Advisors with Respect to Advising Qualified Eligible Persons") and CFTC Rule 4.22(d) ("Reporting to Pool Participants") which require that the CPO distribute and file a certified Annual Report within 90 days of the close of a Pool's fiscal year. Instead, the DSIO accepted CPO's proposal to file a 14-month unaudited Annual Report for the Pools for the period from January 1, 2013 through March 7, 2014, when the Pools complete their final distribution to participants.

In Letter 14-57, the DSIO granted relief to a CPO from the requirement that an independent public accountant audit the financial statement of a Pool's annual report pursuant to CFTC Rule 4.22(c) and (d) for the fiscal year ending on December 31, 2013. The DSIO stated it grants the relief under the condition that the CPO distributes unaudited financial statements within 90 days of the end of the Pool's 2013 fiscal year.

Lofchie Comment: Rather than issuing so many no-action letters providing relief from annual reporting requirements for stub periods within a year, the CFTC should consider issuing generalized relief that would allow the agency to attend to issues of greater importance to the market as a whole.

See: CFTC Letter 14-56; CFTC Letter 14-57.