NFA Adopts CPO Quarterly Reporting Rule

The NFA recently adopted new Rule 2-46 which will require commodity pool operators to make a quarterly report to the NFA.  This quarterly reporting requirement is in addition to the annual audit financial statement filing requirement and must be completed through the NFA’s online filing system.

We have provided an overview of the major requirements of the new rule and have posted the complete text of the new rule below.

Overview of NFA Rule 2-46

Who has to file?

Generally all registered CPOs will need to file the report with respect to the pools which they manage.  This includes CPOs to both 4.7 and 4.12 funds.  Operators of 4.13 funds will not need to file.

What needs to be filed?

The CPO will need to make a filing which includes the following information:

  1. Key Relationships – pool administrators, carrying brokers, trading managers, custodians
  2. Statement of Changes in NAV
  3. Monthly Rates of Return
  4. Schedule of Investments – all pool investments greater than 10% of fund NAV need to be disclosed (even if the positions are not futures/commodities)

When do quarterly reports need to be filed?

The filing must be made within 45 days of the end of each quarter.  The rule is now effective and as such the first filing will be due within 45 days after March 31, 2010.

Where do CPOs file the reports?

The CPO must file on the NFA’s EasyFile system.

Why the new rule?

The NFA wants more information on the trading which is going on, especially with respect to Regulation 4.7 pools which are not required to submit disclosure documents to the NFA.  In the adopting release, the NFA stated:

NFA recently developed a new risk management system designed to assess risks, identify trends and assign audit priorities. NFA is concerned, however, that the current information that we have relating to commodity pools – particularly CFTC Regulation 4.7 exempt pools – may not provide sufficient information for NFA to fully utilize the risk system’s capabilities. The additional limited performance and operational data NFA desires to collect is necessary so that the new risk system can provide an optimal benefit.

The full rule can be found here.

The notice of adoption of the new rule can be found here.


Rule 2-46. CPO Quarterly Reporting Requirements

Each CPO Member must report on a quarterly basis to NFA, for each pool that it operates and for which it has any reporting requirement under CFTC Regulation 4.22, the following information in a form and manner prescribed by NFA within 45 days after the end of each quarterly reporting period:

(a) The identity of the pool’s administrator, carrying broker(s), trading manager(s); and custodian(s);

(b) A statement of changes in net asset value for the quarterly reporting period;

(c) Monthly performance for the three months comprising the quarterly reporting period;

(d) A schedule of investments identifying any investment that exceeds 10% of the pool’s net asset value at the end of the quarterly reporting period.


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Cole-Frieman & Mallon LLP can provide CPOs with comprehensive support during the filing process.  Bart Mallon, Esq. can be reached directly at 415-868-5345.