On April 8th, the National Futures Association (“NFA”) issued its Notice to Members I-15-13 (the “NTM”), which will be of interest to:
1) Any commodity pool operator (CPO) relying on CFTC No-Action Letters 14-69 or 14-126 in order to delegate certain of their oversight responsbilities as a CPO to another registered CPO; and
2) Any NFA member conducting due diligence pursuant to NFA Bylaw 1101 with respect to the status of a CPO as being properly registered or exempt from registration.
In sum, the NTM describes updates that were made to the NFA’s EasyFile system in order to allow a registered CPO to notify the NFA that another CPO has delegated to the registered CPO the investment management authority over a particular pool. The registered CPO will provide this notification in response to a question in NFA’s EasyFile system when filing a pool’s (i.e., a fund’s) annual financial statement. At this time, CPOs can only inform the NFA of a delegated pool through the annual financial statement filing made in respect of such pool. As explained in the NTM, the NFA is “actively working on providing CPOs with an alternative method to inform [the] NFA of delegated pools in instances for which an annual financial statement is not required.”
As a result of these updates, the NFA’s BASIC system will automatically reflect the fund’s status as a “Delegated Pool” of that particular registered CPO.
The NTM also provides specific guidance to the effect that any NFA member conducting due diligence on the CPOs to such a fund for purposes of NFA Bylaw 1101 can rely on the listing and designation of a particular fund as a “Delegated Pool”.
The NTM is available here.
Good day. Good update!