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ARTICLE · 20 SEPTEMBER 2024

CFTC Finalizes Long-Awaited Update To Rule 4.7

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On September 12, the Commodity Futures Trading Commission (CFTC or Commission) published a final rule, adopting amendments to CFTC Rule 4.7, which provides exemptive relief from certain compliance...

United StatesFinance and Banking
Scott Moss
Scott Moss
Trevor Levine
Trevor Levine
Natalie K. Marfo
Natalie K. Marfo

What You Need To Know:

The final rule updates various provisions of the regulation, which have remained unchanged since its original adoption in 1992. Specifically, the final rule:

  • Amends the definition of "Portfolio Requirement" by increasing the thresholds for securities portfolio, initial margin, and premiums. These revised thresholds must be met for prospective pool participants to qualify as "Qualified Eligible Persons" under the Rule 4.7 exemption.
  • Codifies the exemptive relief typically granted to CPOs operating as funds of funds, allowing them to distribute account statements to pool participants monthly, within 45 days of month-end.
  • Requires CPOs to comply with the increased Portfolio Requirement thresholds six months after the final rule is published in the Federal Register and permits eligible CPOs to adopt the monthly account statement reporting schedule 60 days after its publication.

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