CFTC Proposes Rule to Codify CPO Registration Exemption

The Commodity Futures Trading Commission (CFTC) has proposed a rule to codify existing no-action relief and reinstate a pre-2012 registration exemption for certain commodity pool operators (CPOs) and commodity trading advisors (CTAs). This move would convert a temporary, staff-level accommodation into a durable, rule-based compliance pathway for managers of private funds offered to qualified eligible persons (QEPs).

Sophisticated counsel should note that the proposal differs materially from the current no-action relief. Most notably, the proposed rule would require a CPO to offer all participants a right of redemption before it could deregister, a requirement absent from the current relief. The proposal also modifies investor eligibility, narrowing the definition for individual investors while broadening it for institutional investors to include certain categories of accredited investors. This creates a strategic dilemma for fund managers, who must weigh the certainty of a final rule against the more straightforward deregistration process available now.

Managers should evaluate whether to act under the existing no-action letters before a final rule is adopted. The public comment period on the proposal ends October 5, 2026.