Commodity Pool Operators
Investor appetite for products focused on futures and commodity trading has strengthened in recent years as traditional equity and debt markets have delivered unimpressive returns. Commodity pool operators that can present investors with a sound investment proposition have an opportunity to attract significant assets and develop lucrative professional money management businesses.
We assist new and seasoned commodity pool operators as they develop and grow asset management organizations focused on futures and commodity trading. Our services are comprehensive and include fund formation and CPO registration, advisory regarding available exemptions from CPO registration, assistance with marketing strategies, and ongoing advisory and compliance support.
Our experienced team of attorneys has handled complex legal matters for commodity pool operator clients pursuing highly varied strategies and structures. We routinely form master-feeder commodity pool structures and multi-advisor pools, advise regarding the use of affiliated introducing brokers and counterparties, handle advanced compensation structures, and generally assist our clients in accomplishing their goals within a compliant structure.
For clients that determine CPO registration to be the best path, we offer an end-to-end CPO registration solution. CPO registration requires that the significant owners of the commodity pool operator firm register as Principals with National Futures Association and that the individuals who will be involved in solicitation activities register as Associated Persons and take and pass the necessary examinations. The commodity pool operator firm must pay certain filing fees to National Futures Association and must submit a Disclosure Document for approval by National Futures Association for each pool to be managed by the commodity pool operator.
Several exemptions do exist for funds that engage in only a limited amount of futures and commodity trading, manage only a small amount of assets, or solicit only very high-net-worth individuals and institutional investors.
We invite you to schedule a complimentary consultation to determine how we might assist you in achieving your goals.
We provide the following services in connection with the formation and operation of Commodity Pools and Commodity Pool Operators:
- Preparing and filing the organizational documents to form the commodity pool operator firm and commodity pool itself as legal entities (if not already formed by you) – including advising on the most appropriate jurisdiction for each entity
- Preparing an operating agreement to govern the operations and internal policies and procedures of your CPO firm
- Advising you with respect to available exemptions from CPO registration and alternate structures, within the scope of your business goals
- Providing advice regarding marketing strategies for the commodity pool operator in accordance with securities laws, CFTC regulations, and NFA compliance rules
- Establishing an account with National Futures Association for the commodity pool operator firm and obtaining access to the Online Registration System (“ORS”)
- Preparing and filing commodity pool operator registration Form 7-R with the CFTC and National Futures Association for your firm
- Preparing and filing with the CFTC and National Futures Association Form 8-R for each of your CPO firm’s Principals and Associated Persons
- Drafting organizational minutes for the CPO appointing initial managers and officers
- Preparing a confidential private offering memorandum / Disclosure Document, limited partnership agreement or operating agreement, and subscription documents for the commodity pool
- Interfacing with compliance personnel at National Futures Association (and responding to any deficiency letters) as part of both the (i) CPO registration process and (ii) Disclosure Document approval process
- Preparing a disaster recovery plan, a business continuity plan, and written operational policies and procedures as required by NFA/CFTC rules
- Handling other start-up related legal issues