CFTC Issues Guidance to CPOs and CTAs on Reporting Requirements
The CFTC recently issued a lengthy FAQ to assist CPOs and CTAs with their Form CPO-PQR and Form CTA-PR filing requirements. In addition to advising CPOs and CTAs on technical requirements associated with the forms, the CFTC also clarified a number of other items. In the FAQ, the CFTC clarified that registered CPOs who do not currently manage pools, or manage pools that would not require the CPO to be registered, such as the exemption provided under CFTC Rule 4.13(a)(3) (a de minimis exemption), are not required to file Form CPO-PQR. The FAQ also noted that those CPOs registered with the SEC as investment advisers that file Form PF with the SEC may file the Form PF in lieu of the Form CPO-PQR provided it also includes Schedule A to the Form CPO-PQR. For pools with multiple CPOs, the FAQ also clarified that each CPO is required to file a Form CPO-PQR.
A Form CPO-PQR must be filed by registered CPOs if they managed a pool during a “Reporting Period.” For large CPOs with $5 billion or more under management, the Reporting Period is quarterly. For mid-size and smaller CPOs with less than $5 billion under management, the Reporting Period is annually. In addition to the items set forth above, the FAQ also addresses calculations related to parallel pools and parallel managed accounts, assets under management determinations, and completing the Schedule of Investments and Schedule C, in the case of large CPOs.
The FAQ also addresses issues associated with the Form CTA-PR including what constitutes a trading program for purposes of determining the number of trading programs offered, and calculating assets under management in the case of a CTA advising a pool and in situations where multiple CTAs may have discretion over the same assets, either directly or indirectly. Generally, CTAs are required to file Form CTA-PR on a quarterly basis.
CFTC Exempts Certain CTAs from filing Form CTA-PR
The CFTC recently clarified that CTAs that do not direct trading are not required to file the Form CTA-PR. In CFTC Letter 15-47 issued in July 2015, the CFTC granted no-action relief to CTAs that may be registered but do not direct accounts. The relief provided in CFTC Letter 15-47 was supported by similar relief previously provided in CFTC No Letter 14-115 to registered CPOs that do not manage pools. In support of its decision, the CFTC agreed with the rationale that requiring CTAs that do not direct trading to complete and submit Form CTA-PR would provide the CFTC with limited additional information about the CTA. The relief providing in CFTC Letter 15-47 is self-executing meaning that no additional steps or notice filing is required in order for a CTA to rely upon the exemption.