Category: CFTC

CFTC Allows General Solicitation for Private Funds

In early 2013, the Commodity Futures Trading Commission decided to grab for more regulatory oversight and revoked some long-standing exemptions. The CFTC also got handed the regulatory oversight of non-securities derivatives. As a result, private funds with interest rate hedges had to figure out if they had to register with the CFTC as a commodity

Do U.S. Regulators Listen to the Public?

Regulators get piles of comment letters on proposed rules. But do the comments have an affect? Three math and finance professors tried analyzed the text of comments and regulations to find and answer. Andrei A. Kirilenko, Shawn Mankad, and George Michailidis created a regulatory analytical tool called RegRank. The three researchers pointed RegRank at the

Mortgage REITs Get Relief from the CFTC

The CFTC continues the journey out of the hole it dug itself. In February the CFTC stated that one swap contract would be enough to trigger the registration requirement. This runs with the CFTC long standing narrow interpretation of the commodity pool definition. The CFTC retreated from this position with respect to REITs in October.

CFTC Relief for Funds of Funds

The CFTC has given funds of funds six more months to determine whether they needs to register as a commodity pool operator. Dodd-Frank has made interest rate and some foreign exchange derivatives “commodities” and made them subject to oversight by the CFTC. There is a December 31, 2012 deadline approaching. However, the CFTC rescinded guidance

What is a Commodity Pool?

The CFTC stretched when it said that a fund entering into even a single swap used purely for hedging purposes — will hold “commodity interests” and accordingly could be viewed as commodity pools by the CFTC. The CFTC has construed the concept of commodity pool broadly and has consistently maintained that there is no minimum

Will the CFTC Extend the Registration Deadline?

Private equity funds with interest rate swaps or foreign exchange hedges have been wringing their hands over registration with the Commodities Futures Trading Commission. Dodd-Frank has brought those derivative instruments into the oversight of the CFTC. Shortly, they will be considered commodities. That means funds that previously did not consider themselves to be trading in

A CFTC Exemption for Private Equity Funds

The CFTC is going to dramatically expand its realm through the one-two punch of gaining regulatory control over non-securities derivatives and the removal of a widely used exemption. (With the release of REITs from the definition of “commodity pool” perhaps the CFTC is loosening its grip.) Fortunately, there is another exemption that most private equity

REITs and the CFTC

Dodd-Frank’s Title VII is likely to sweep a bunch of private equity fund operators under the CFTC’s registration requirement. The CFTC stated that a single interest rate swap or foreign exchange hedge could drag the fund manager into the definition of “Commodity Pool Operator” (7 USC §1a(10) and have to register with the CFTC. The

First the SEC, Now the CFTC

The Dodd-Frank Wall Street Reform and Consumer Protection Act is getting ready to land its second regulatory punch to private equity funds. The first was the registration requirement with the Securities and Exchange Commission. The second is the upcoming registration requirement with the Commodities Futures Trading Commission. Two recent developments pull fund managers into the

Are You a CPO?

The first question is what is a CPO and why should I care? The Commodities and Futures Trading Commission decided to tighten the exemptions from registration potentially pulling some hedge funds and private equity funds that previously ignored the CFTC. Davis Polk held a webinar on this topic. Some private fund managers may get the