On April 17, 2012, the Investment Company Institute (“ICI”) and the U.S. Chamber of Commerce (“Chamber”) filed suit against the Commodity Futures Trading Commission "CFTC" in the U.S. District Court for the District of Columbia, challenging the legality of newly amended CFTC Rule 4.5. The rule, which went into effect April 24, 2012, and requires compliance by December 31, 2012, requires certain registered fund advisers to register as CPOs with the CFTC, subjecting them to dual regulation by the SEC and CFTC. The ICI and the Chamber do not challenge the CFTC’s repeal of Rule 4.13(a)(4), which exempts many advisers to private funds from CFTC registrations. The groups seek injunctive relief preventing implementation of the amendments to Rule 4.5.

In a 47-page complaint, the ICI and the Chamber allege that the amendment violates both the Commodity Exchange Act and the Administrative Procedure Act because the CFTC did not perform a proper cost-benefit analysis, failed to provide interested persons with a sufficient opportunity to meaningfully participate in the rulemaking, and offered no justification for the heightened regulation. In sum, the ICI and the Chamber allege that the amendment is unnecessary, redundant and costly.