What is a CFTC no action letter?

No-Action. A no-action letter is a written statement by the staff of a Division of the Commission or its Office of the General Counsel that such staff will not recommend that the Commission commence enforcement action for failure to comply with a specific provision of the Act or Commission regulations.

Who must register as a commodity pool operator?

Commodity pool operators are regulated by the CFTC. They must register with the CFTC as principals or as associated persons. A CPO may also be asked to pass the FINRA Series 31 exam.

Is a REIT a commodity pool?

securitization vehicles and real estate investment trusts (“REITs”) that enter into swaps (including interest rate or currency swaps used solely for hedging purposes) will be holding “commodity interests,” and accordingly could be considered commodity pools under the CEA.

What is no-action relief?

No-action relief is a mechanism that allows registrants to obtain certain assurances when their conduct may touch upon a gray area of regulation, or even may be technically proscribed, but does not raise the policy concerns underlying a particular rule.

Where can I find SEC no-action letters?

Division of Trading and Markets No-Action, Exemptive, and Interpretive Letters

  • Request letters may be sent to the following email address: [email protected].
  • For assistance in preparing a request for a no-action, interpretive or exemptive letter, please refer to the General Information section below.

How do I file a CFTC exemption?

What to File:

  1. Provide the following: name, main business address, main business telephone, main FAX number, and main email address of the person claiming exemption.
  2. Must be filed by a representative duly authorized to bind the trading advisor.

How much do commodity pool operators make?

While ZipRecruiter is seeing annual salaries as high as $97,500 and as low as $15,000, the majority of Commodity Pool Operator salaries currently range between $28,000 (25th percentile) to $44,500 (75th percentile) with top earners (90th percentile) making $80,000 annually across the United States.

What is a commodity pool CFTC?

A commodity pool is a shared private pool of money from multiple participants to speculate in futures, swaps, or options markets. The commodity pool operator (CPO) manages and solicits funds for the pool. Most CPOs must be registered members of the National Futures Association (NFA) to conduct business.

What is a commodity interest?

Commodity interest means any commodity futures or commodity option contract traded on or subject to the rules of a contract market or linked exchange, or cash commodities traded on or subject to the rules of a board of trade which has been designated as a contract market.

What is the purpose of a no-action letter?

A no-action letter is a letter written by the staff members of a government agency, requested by an entity subject to regulation by that agency, indicating that the staff will not recommend that the agency take legal action against the entity, should the entity engage in a course of action proposed by the entity …

How long does it take to get a no-action letter?

FinCEN notes in its report, however, that no-action letters for other agencies like the SEC and the CFTC typically take between several months to over a year to issue.

Are no-action letters public?

No-action letters are public records.

Is a commodity pool a hedge fund?

Commodity pools are similar to mutual funds, which are funds of pooled money that invest in a basket of securities, including stocks. Many hedge funds–private pools of activity managed capital–are commodity pools.

How do I become a certified commodity trader?

5 Essential Steps For Traders To Start Commodity Trading

  1. Step 1 – Getting Familiar About The Commodity Trading Exchanges.
  2. Step 2 – Selecting the Efficient Stockbroker.
  3. Step 3 – Opening The Commodity Trading Account.
  4. Step 4 – Making An Initial Deposit.
  5. Step 5 – Create A Trading Plan.

Is a hedge fund a commodity pool?

What is a commodity under CEA?

The term “commodity pool” is defined broadly under the Commodity Exchange Act (“CEA”) to include “any investment trust, syndicate or similar form of enterprise operated for the purpose of trading in commodity interests, including any – commodity for future delivery, securities futures product or swap, agreement in …

What is a security vs commodity?

A security is a financial instrument, but a commodity is not a security. Just like a commodity, a security too has a monetary value, but unlike a commodity, a security is not traded between just two parties. A security can be traded between multiple parties.

How do I find a no-action letter?

No-action letters are available in the following sources:

  1. Federal Securities Law Reporter.
  2. SEC website – Division of Corporation Finance No-Action, Interpretive and Exemptive Letters.
  3. Lexis.
  4. Westlaw.

What is a 4.7 exemption?

For those of you that have no idea what a 4.7 exemption is; filing a 4.7 exemption means that a CTA is exempt from certain regulations such as filing a Disclosure Document with the National Futures Association (“NFA”) – but in exchange for that relief, can only accept QEP investors (Qualified Eligible Investors, which …

What is the CFTC no action letter 12-38?

2. FOF Exemption – 12-38 Letter If the fund’s manager acts in whole or in part as a CPO of one or more fund of funds, the manager may be able to rely on CFTC No-Action Letter 12-38 (the “ Letter 12-38 ”) to avoid registration as a CPO.

Can CPOs still rely on letter 12-38?

This Letter 12-38 relief is not self-executing, and the manager must file a claim to perfect the relief with the NFA with respect to the fund. No annual affirmation is required to maintain this exemption. Once final fund of fund guidance is issued by the CFTC, affected CPOs must reevaluate whether they can continue to rely on Letter 12-38.

How to take advantage of the time-limited no-action relief for fund of funds?

In order to take advantage of the time-limited no-action relief, fund of funds operators must submit a claim to the CFTC and remain in compliance with the following criteria: The commodity pool operator currently structures its operations in whole or in part as a commodity pool operator of one or more “funds of funds”;

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