Proposed CPO-PQR changes could reduce compliance burden

The CFTC has proposed new amendments designed to improve their insights into CPOs. The proposals, in combining some requirements, are likely to reduce the overall reporting burden. 

The US Commodity Futures Trading Commission proposed the amendments to Commission Regulation 4.27 and Form CPO-PQR, which implement the collection of data from registered commodity pool operators. The changes are intended to “update Form CPO-PQR to better integrate the data collected through that form with other available data streams” in order to “further enhance” the CFTC’s oversight of CPOs, commodity pools and CPO’s “respective roles in the commodity interest markets.”

On the same day, in support of the proposed amendments, CFTC Chairman Heath P. Tarbert said

“By refining [the CFTC’s] approach to data collection, today’s amendments—in conjunction with our current market surveillance efforts—would enhance the CFTC’s ability to gain more timely insight into the activities of CPOs and their operated pools.  At the same time, the amendments would reduce reporting burdens for market participants.”

CFTC amendments: three key themes

More focused data collection

  • The greater focus on data collection is designed to streamline the data collected without impacting the CFTC’s ability to effectively oversee the commodity interest markets
  • The CFTC is proposing to eliminate questions where information is available to the CFTC through other means

Better integrated data sets

Questions have been added to enable the data collected on Form CPO-PQR to be used conjunctively with other data regarding the commodity interest markets.

More efficient filings

Permitting CPOs to file the National Futures Association’s Form PQR in lieu of the CFTC’s proposed revised Form CPO-PQR reduces the unnecessary filing burden on registrants.

This will also make sure both the National Futures Association and the Commission have the information needed to satisfy their statutory responsibilities.

Firms to save time and resource under the CFTC’s new proposal

The proposal should save firms time and resource, as the amendments would remove the lengthiest and most detailed sections of Form PQR. These changes will consequently unify the CFTC’s version of the Form with the version used by the National Futures Association, which registered CPOs must also file.

The proposal would eliminate the provision of Rule 4.27(d) that allows a CPO that is a registered investment adviser to list its investment vehicles, which aren’t private funds on Securities and Exchange Commission Form PF instead of on Form PQR. Under the proposal, these funds would have to be included in the Form PQR.

As always, the CFTC seeks comments to the proposed rule and specific questions about the amendments. Comments must be received by mid-June (60 days from April 14, 2020).

How we can help

Get in touch if you’d like more details on what this means for your firm. We can provide ongoing support for your CFTC and NFA needs, as well as help with regulatory reporting.