/Vol. 78, No. 163/Thursday, August 22, 2013/Rules and Regulations
7 U.S.C. 1,
7 U.S.C. 6m.
7 U.S.C. 1a(11) and 1a(12).
7 U.S.C. 6n(3)(A). Under part 4 of theCommission’s regulations, unless otherwiseprovided by the Commission, entities registered asCPOs have reporting obligations with respect totheir operated pools.
17 CFR 4.22.
7 U.S.C. 12a(5).
17 CFR 4.5.
77 FR 11252 (Feb. 24, 2012);correction 77 FR 17328 (March 26, 2012). Prior tothis Amendment, all RICs, and the principals andemployees thereof, were excluded from thedefinition of ‘‘commodity pool operator,’’ by virtueof the RICs registration under the InvestmentCompany Act of 1940. The 2012 amendment to§4.5 maintained this exclusion for those RICs thatengage in a de minimis amount of non-bona fidehedging commodity interest transactions.
Specifically, the amendment to §4.5 retained thisexclusion for RICs whose non-bona fide hedgingcommodity interest transactions require aggregateinitial margin and premiums that do not exceed fivepercent of the liquidation value of the qualifyingpool’s portfolio, or whose non-bona fide hedgingcommodity interest transactions’ aggregate netnotional value does not exceed 100 percent of theliquidation value of the pool’s portfolio.
15 U.S.C. 80a–1,
‘‘SEC’’ as used hereinmeans the Securities and Exchange Commission orits staff, as the context requires.
17 CFR 1.3(yy).
Pursuant to the terms of §4.14(a)(4), CPOs arenot required to register as CTAs if the CPOs’commodity trading advice is directed solely to, andfor the sole use of, the pool or pools for which theyare registered as CPOs. 17 CFR 4.14(a)(4).
76 FR 7976 (Feb. 11, 2011).
Notice of CFTC Staff RoundtableDiscussion on Proposed Changes to Registrationand Compliance Regime for Commodity PoolOperators and Commodity Trading Advisors,available at
counterparty,’’ as such term is used in§50.50(b), and for purposes of §50.50(b)(1)(iii)(A), the reportingcounterparty, as determined pursuant to§45.8, shall report that an exemption is being elected in accordance with thissection.
Issued in Washington, DC, on August 13,2013, by the Commission.
Melissa D. Jurgens,
Secretary of the Commission.
The following appendix will notappear in the Code of Federal Regulations.
Appendix to Clearing Exemption forCertain Swaps Entered Into byCooperatives—Commission VotingSummary
Appendix 1—Commission Voting Summary
On this matter, Chairman Gensler andCommissioners Chilton, O’Malia, and Wetjenvoted in the affirmative.
[FR Doc. 2013–19945 Filed 8–21–13; 8:45 am]
BILLING CODE 6351–01–P
COMMODITY FUTURES TRADINGCOMMISSION17 CFR Part 4
Harmonization of ComplianceObligations for Registered InvestmentCompanies Required To Register asCommodity Pool Operators
Commodity Futures TradingCommission.
The Commodity FuturesTrading Commission (‘‘Commission’’ or‘‘CFTC’’) is adopting final regulationswith respect to certain complianceobligations for commodity pooloperators (‘‘CPOs’’) of investmentcompanies registered under theInvestment Company Act of 1940(‘‘registered investment companies’’ or‘‘RICs’’) that are required to register dueto the recent amendments to itsregulations. The Commission is alsoadopting amendments to certainprovisions of part 4 of the Commission’sregulations that are applicable to allCPOs and Commodity Trading Advisors(‘‘CTAs’’).
This rule iseffective August 22, 2013, except theamendments to §§4.7(b)(4), 4.12(c)(3)(i),4.23, 4.26, and 4.36 which are effectiveSeptember 23, 2013.
Registered CPOsseeking exemption under these rulesshall be required to comply with theconditions adopted in §4.12(c)(3)(i)when the associated registeredinvestment company updates itsprospectus as described in Section II.F., below, and files the prospectus with theSEC. Moreover, the publication of theserules trigger the conditional compliancedate that was established in theCommodity Pool Operators andCommodity Trading Advisors:Compliance Obligations rulemaking. 77FR 11252, 11252 (Feb. 24, 2012). Withthe publication of these rules, registeredCPOs of RICs must comply with §4.27on or before October 21, 2013.
FOR FURTHER INFORMATION CONTACT
Amanda Lesher Olear, AssociateDirector, Telephone: (202) 418–5283,Email:
or MichaelEhrstein, Attorney-Advisor, Telephone:202–418–5957, Email:
Division of Swap Dealer andIntermediary Oversight, CommodityFutures Trading Commission, ThreeLafayette Centre, 1155 21st Street NW.,Washington, DC 20581.
This rulemaking is related to the finalrule adopted under RIN 3038–AD30.
A. Recent Amendments to §4.5 asApplicable to RICs
The Commodity Exchange Act(‘‘CEA’’)
provides the Commissionwith the authority to require registrationof CPOs and CTAs,
to exclude anyentity from registration as a CPO orCTA,
and to require ‘‘[e]verycommodity trading advisor andcommodity pool operator registeredunder [the CEA] to maintain books andrecords and file such reports in suchform and manner as may be prescribed by the Commission.’’
The Commissionalso has the authority to ‘‘make andpromulgate such rules and regulationsas, in the judgment of the Commission,are reasonably necessary to effectuatethe provisions or to accomplish any of the purposes of [the CEA].’’
In February 2012, the Commissionadopted modifications to the exclusionsfrom the definition of CPO that aredelineated in §4.5 (‘‘2012 Final Rule’’).
Specifically, the Commission amended§4.5 to modify the exclusion from thedefinition of ‘‘commodity pooloperator’’ for those entities that areinvestment companies registered assuch with the Securities and ExchangeCommission (‘‘SEC’’) pursuant to theInvestment Company Act of 1940 (‘‘’40Act’’).
This modification amended theterms of the exclusion available to CPOsof RICs to include only those CPOs of RICs that commit no more than a deminimis portion of their assets to thetrading of commodity interests that donot fall within the definition of bonafide hedging and who do not marketthemselves as a commodity pool orother commodity investment.
Pursuantto this amendment, any such CPO of aRIC that exceeds this level, or marketsitself as such, will no longer beexcluded from the definition of CPO.Accordingly, except for those CPOs of RICs who commit no more than a deminimis portion of their assets to thetrading of commodity interests that donot fall within the definition of bonafide hedging and who do not marketthemselves as a commodity pool orother commodity investment, anoperator of a RIC that meets thedefinition of ‘‘commodity pooloperator’’ under §4.10(d) of theCommission’s regulations and §1a(11)of the CEA must register as such withthe Commission.
B. Harmonization Proposal
In response to the Commission’sFebruary 2011 proposal to amend the§4.5 exclusion with respect to CPOs of RICs,
as well a staff roundtable heldon July 16, 2011 (‘‘Roundtable’’),
andmeetings with interested parties, theCommission received numerous
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