Effective Dec. 31, 2012, the Commodity Futures Trading Commission (“CFTC”) Rule 4.13(a)(4) exemption from registration as a commodity pool operator (“CPO”) will no longer be available. Private fund managers who rely on this exemption must find an alternative exemption or otherwise register with the CFTC as a CPO. In addition, mutual funds and other registered investment companies will have to comply with new conditions under amended Rule 4.5 if they engage in futures, commodity options or swap transactions.

The CFTC retained the “de minimis” exemption from CPO registration for CPOs of funds that have de minimis futures activity (i.e., either (1) the aggregate initial margin and premiums on commodity interest positions does not exceed five percent of the liquidation value of the fund’s portfolio (including unrealized gains and losses) or (2) the aggregate notional value of such positions does not exceed 100 percent of the liquidation value of the fund’s portfolio (including unrealized gains and losses)).

The CFTC is also imposing new data reporting requirements for registrants under Forms CPO-PQR and CTA-PR.

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