Spotlight On CFTC Rule 4.5

Law360, New York (February 24, 2011, 3:13 PM EST) -- On Jan. 26, 2011, the Commodity Futures Trading Commission proposed amendments to CFTC Rule 4.5.[1] CFTC Rule 4.5 currently excludes certain “qualifying entities,” including registered investment companies (“Registered Funds”), from CFTC regulation as commodity pool operators (“CPOs”).[2]

Under the proposed amendments, Registered Funds wishing to continue to claim the Rule 4.5 exclusion from CPO status would be required to limit their use of commodity futures and commodity options, and possibly swaps (together, “commodity interests”) and comply with certain marketing restrictions.

Significantly, Registered Funds that are unable...
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