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ARTICLE · 22 SEPTEMBER 2014

CFTC Permits CPOs To Advertise

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The CFTC issued an exemptive letter that permits a commodity pool operator relying on an exemption under CFTC Regulation 4.7(b) or 4.13(a)(3) to engage in general solicitation.

United StatesFinance and Banking
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On September 9, 2014, the Commodity Futures Trading Commission (CFTC) issued an exemptive letter (No. 14-116) that permits a commodity pool operator (CPO) relying on an exemption under CFTC Regulation 4.7(b) or 4.13(a)(3) to engage in general solicitation or general advertising under certain circumstances, as permitted under recent amendments to Rule 506(c) of SEC Regulation D implementing the Jumpstart Our Business Startups Act (JOBS Act).

Background

CFTC Regulation 4.13(a)(3) provides an exemption from CPO registration with respect to a fund if the fund only engages in limited trading of commodity interests (generally, if the aggregate net notional value of all commodity interests is less than 100% of the fund's net assets, or if the aggregate margin and premiums for commodity interests is less than 5% of the fund's net assets). However, the exemption under Regulation 4.13(a)(3) is only available if the interests in the fund are "offered and sold without

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