CFTC Relief Permits Commodity Pools to Use General Solicitation


On September 9, 2014, the Commodity Futures Trading Commission (the “CFTC”) issued CFTC Letter No. 14-116 (the “CFTC Letter”) providing exemptive relief allowing commodity pools to use general solicitation in certain types of private offerings, including offerings of private fund interests. The CFTC Letter is available here.

Prior to the CFTC providing this relief, the following types of commodity pools were restricted from using general solicitation to market interests in those pools:

  • 4.13(a)(3)-Exempt Pools - pools whose operators rely on the exemption from commodity pool operator (“CPO”) registration in CFTC Regulation § 4.13(a)(3) (for pools that trade a limited amount of commodity interests).
  • 4.7-Exempt Pools - pools whose registered CPOs rely on the relief from certain disclosure, reporting and recordkeeping requirements in CFTC Regulation § 4.7 (for pools whose participants are limited to qualified eligible persons).

This represented a distinction between CFTC regulations and Securities and Exchange Commission (“SEC”) rules because private funds that were not commodity pools were permitted to use general solicitation following the SEC’s implementation of Securities Act Rule 506(c) in July 2013 pursuant to the Jumpstart Our Business Startups Act (JOBS Act). For a more complete discussion of Rule 506(c), please see our prior publication, Rule 506 Revolution: The SEC Adopts Significant Amendments to the Rules Regarding Private Offerings of Securities.

In order to take advantage of this new CFTC relief, commodity pools must satisfy the following conditions:

  • The relevant offering must be conducted in accordance with either Securities Act 506(c) or, if it involves a resale of certain securities to qualified institutional buyers, Rule 144A.
  • The relief is not self-executing and must be claimed by filing a notice with the CFTC Division of Swap Dealer and Intermediary Oversight. This notice filing will be effective upon filing and must provide the following information as set forth in the CFTC Letter:
    • The name, business address and main business telephone number of the CPO claiming the relief;
    • The name of the pool(s) for which the claim is being filed;
    • Whether the CPO claiming relief is relying on Rule 506(c) or using a 144A reseller; and
    • Representations that the CPO is complying with the other requirements of 4.7 or 4.13(a)(3), as applicable, with respect to the listed pools.

For additional information regarding the foregoing, please contact one of the lawyers listed below:

Taylor H. Wilson

Vicki L. Martin-Odette

Daren R. Domina

Madelyn Calabrese

Shoshana Thoma-Isgur

Heather N. Wyckoff


Evan K. Hall


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