On October 15, 2014, the Division of Swap Dealer and Intermediary Oversight (“Division”) of the US Commodity Futures Trading Commission (“CFTC”) issued a no-action letter (“Letter 14-126”)1 providing conditional relief from the requirement to register with the CFTC as a commodity pool operator (“CPO”) for certain persons that have delegated their duties as a CPO of a commodity pool (“Delegating CPO”) to a permissible third-party CPO (“Designated CPO”)

Background -

Earlier this year, the Division issued a no-action letter (“Letter 14-69”)2 that established a streamlined process by which the Division would grant CPO registration no-action relief to certain Delegating CPOs, provided they and their respective Designated CPOs satisfied several criteria specified in Letter 14-69. Those criteria included, among other things, the requirements that (i) the Delegating CPO have delegated to the Designated CPO all of its investment management authority for the relevant pool, (ii) the Delegating CPO not participate in the solicitation of participants for the pool, and (iii) the Delegating CPO not manage any property of the pool (those three requirements, collectively, the “Restricted CPO Activities”). In addition, the relief made available by Letter 14-69 was not self-executing. Rather, a Delegating CPO wishing to rely on such relief was required to submit to the Division a formal request for no-action relief pursuant to CFTC Rule 140.99 in the form provided in Letter 14-69.