CFTC Grants No-Action Relief from Registration to Family Offices that are Commodity Pool Operators

The CFTC recently granted no-action relief to family offices that are commodity pool operators ("CPOs") from CPO registration with the CFTC.  This relief is not self-executing; a family office that is a CPO must provide notice to the CFTC in order to claim the relief.

 

Required Conditions for No-Action Relief Eligibility

 

To qualify for the relief, a CPO that is a family office must:

 

a. submit a claim to take advantage of the relief; and

 

b. remain in compliance with the meaning and intent of a "family office" as defined in  

Rule 202(a)(11)(G)-1 of the Investment Advisers Act of 1940 (the "Advisers Act").[1]

 

Action Required to Claim the Relief

 

As the no-action relief is not self-executing, an eligible family office CPO must file a claim with the CFTC via email requesting the relief. Provided that the claim is complete, the relief will be effective upon filing. The claim for the no-action relief must:

 

a. state the name, main business address, and main business telephone number of the CPO claiming the relief;

 

b. state the capacity (i.e., CPO) and, where applicable, the name of the pool(s) for which the claim is being filed;

 

c. state that the CPO is a family office within the meaning and intent of Rule 202(a)(11)(G)-1 of the Advisers Act and that the CPO will notify the CFTC if it ceases to meet the family office definition;

 

d. be electronically signed by the CPO; and

 

e. be filed with the CFTC's Division of Swap Dealer and Intermediary Oversight (the "DSIO") by email at dsionoaction@cftc.gov using the subject line "Family Office."

 

Deadlines for Claiming the Relief

 

For a family office in operation as of December 1, 2012, the claim must be emailed to the DSIO prior to December 31, 2012.

 

For a family office that begins to operate after December 1, 2012, the claim must be emailed to the DSIO within 30 days after it begins to operate as a family office.


[1] A family office is defined in Rule 202(a)(11)(G)-1 of the Investment Advisers Act of 1940 as a company (including its directors, partners, members, trustees, etc.) that: (a) has no clients other than "family clients"; (b) is wholly owned by family clients and exclusively controlled (directly or indirectly) by one or more "family members" and/or "family entities"; and (c) does not hold itself out to the public as an investment adviser. 

Cheryl Spratt