MFA Seeks Clarification on Certain CPO Registration Relief

The Managed Funds Association ("MFA") asked the CFTC to revise and republish Staff No-Action Letter 25-50 to clarify the scope of registration relief for certain commodity pool operators ("CPOs") that delegate investment management responsibilities.

In the no-action letter, the CFTC Market Participants Division ("Division") granted an exemption for SEC-registered investment advisers operating commodity pools exclusively for qualified eligible persons ("QEPs"). (See previous coverage.) The MFA asserted that the letter inadvertently created regulatory uncertainty regarding longstanding delegation agreements. MFA said that prior guidance under Staff Letter 14-126 permits a "delegating CPO"—such as a private fund's general partner or board of directors—to bypass registration only if the "designated CPO" assuming management duties is formally registered with the CFTC. The MFA stated that because Letter 25-50 now allows these designated CPOs to withdraw from registration, delegating entities are unsure if they remain compliant under the prior framework.

MFA requested that the Division add a specific paragraph to Letter 25-50 confirming that a designated CPO relying on the new QEP-based exemption can stand in the place of a registered CPO. The association argued that this minor revision would not expand the substantive scope of the relief, but rather preserve widely used institutional delegation structures. MFA cautioned that failing to provide this clarification could frustrate the underlying policy goals of the recent exemption and unnecessarily disrupt established fund operations.