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ARTICLE · 25 OCTOBER 2023

Significant Changes Proposed To CFTC Rule 4.7 'Registration Lite'

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For the last three decades, CFTC Regulation 4.7 has provided registered CPOs and CTAs with exemptions from certain compliance requirements under Part 4 of the Commodity Exchange Act...

United StatesFinance and Banking
Christian Hennion
Christian Hennion
Mia Hayes
Mia Hayes
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For the last three decades, CFTC Regulation 4.7 has provided registered CPOs and CTAs with exemptions from certain compliance requirements under Part 4 of the Commodity Exchange Act, in their dealings with investors and clients that are "qualified eligible persons" (or "QEPs") under that rule. The widespread reliance upon Regulation 4.7, which eliminates many of the disclosure obligations that would otherwise apply under CFTC rules, has led the CFTC to reassess whether the provisions of the rule continue to align with the purposes motivating its adoption, culminating in a proposal to implement substantial amendments to the rule.

The CFTC proposal outlines changes in four categories: (1) disclosure requirements, (2) QEP eligibility thresholds, (3) periodic pool reporting relief for funds of funds, and (4) technical changes to the rule text. The proposed amendments to the disclosure requirements would dramatically change the information that Rule 4.7 CPOs and CTAs are

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