On May 12, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight announced a streamlined process that will allow a commodity pool operator (CPO) that has delegated investment management authority (Delegating CPO) to another person registered as a CPO (Designated CPO) to request no-action relief from CPO registration. To qualify for the streamlined approach, the Delegating CPO must submit a form no-action letter adopted by the CFTC pursuant to which the Delegating CPO represents that it will: (i) delegate all of its investment management authority to the Designated CPO; (ii) refrain from participating in the solicitation of participants for or managing any property of the commodity pool; (iii) not be subject to a statutory disqualification; (iv) be able to identify a business purpose (other than avoiding registration requirements) that explains why the Designated CPO is a separate entity; (v) ensure that the Designated CPO maintains books and records related to the commodity pool in accordance with CFTC regulations; (vi) control, be controlled by or be under common control with the Designated CPO; and (vii) enter into an agreement to be jointly and severally liable with the Designated CPO or be subject to liability as a board member of the commodity pool.  

The announcement and form of the streamlined no-action request letter are available here.