As regulated entities, registered commodity pool operators have obligations to maintain and have ready access to a prescribed set of books and records. On August 13, in recognition of widespread market practice, the CFTC adopted regulations permitting CPOs to maintain certain books and records with a third party. Eligible third party recordkeepers under the new rule include:

  • A pool’s administrator, distributor or custodian;
  • A bank; or
  • A registered broker or dealer acting in a similar capacity with respect to the pool.

This new provision (included as part of broader rules on the harmonization of certain SEC and CFTC compliance obligations for registered investment companies) requires all CPOs that maintain required books and records with a third party to file for an additional exemption through the National Futures Association. This filing is required by the 30th day following publication of the new harmonization rules in the Federal Register and, while the CFTC and the NFA have not yet formalized the process, we expect it to be similar to the existing process for claiming exemptions through the NFA’s existing exemption filing system.

Click here to read more about what is included in the exemption filing.