CFTC Part 4 Exemption Easy Reference Guide - NFA

1 CFTC part 4 Exemption Easy Reference Guide Click on the Exemption type for more information on how to file and requirements for each Exemption . Exemption Type General Relief Who Qualifies Exemptions from CPO Registration Exemption provides an entity relief from CPO. (a)(1) (Pool level for Exempt CPO) An entity acting as a pool operator registration Exemption provides an entity relief from CPO. (a)(2) (Pool level for Exempt CPO) An entity acting as a pool operator registration Exemption provides relief from CPO registration in (a)(3) (Pool level for Exempt CPO) An entity acting as a pool operator cases where the pool trades minimal amount of futures Exemption provides relief from CPO registration to a (a)(5) (Pool level for Registered CPO) director and trustee of an ETF pool operated by a CPO. registered CPO. An investment company registered as such under the Investment Company Act of 1940; an insurance This exclusion provides relief from CPO registration on company subject to regulation by any state; a bank, (Pool level for Exempt CPO) behalf of a qualifying entity, if entity is already regulated trust company or any other such financial depository by another regulatory authority institution subject to US regulation; or a trustee of a named fiduciary or an employer maintaining a pension plan that is subject to ERISA.

2 Exemption from CTA Registration (a)(8) (Firm level for CTA) Exemption provides relief from CTA registration An entity acting as a trading advisor CFTC part 4 Exemption Easy Reference Guide Click on the Exemption type for more information on how to file and requirements for each Exemption . Exemption Type General Relief Who Qualifies Exemptions that provide relief to registered CPOs and/or CTAs from certain regulatory requirements Registered CPO or CTA is provided relief from certain (Firm level for CTA)(Pool level for CPO) financial reporting and disclosure document CPO or CTA. requirements for pools with all QEPs Registered CPO that operates exempt pools is (b)(4) (Pool level for CPOs of pools) provided relief from maintaining books and records at CPO. the main business office Registered CTA that is exempt is provided relief (c)(2) (Firm level for CTA) from maintaining books and records at the main CTA. business office Registered CPO is provided relief from specific (b) (Pool level for CPO) requirements if less than 10% of the pool's assets CPO.

3 Invested in futures Registered CPO is provided relief from Disclosure Document delivery, and financial statement distribution (c)(2) (Pool level for CPOs of ETFs) CPO. if the pool is a Commodity Exchange Traded Fund (ETF). Registered CPO is provided relief to use substituted (c)(3) (Pool level for CPOs of RICs) compliance if the pool is a Registered Investment CPO. Company (RIC). Registered CPO is provided relief from reporting and CFTC Advisory 18-96 (Pool level for CPO) CPO. disclosure requirements for foreign pools Registered CPO is provided relief from maintaining (c) (Firm level or Pool level for CPO) CPO. books and records at the main business office Registered CTA is provided relief from maintaining (Firm level for CTA) CTA. books and records at the main business office CFTC part 4 Exemption Easy Reference Guide Exemptions from CPO Registration Exemption Type Requirements How to File Annual Requirements Each person who has filed a notice of Exemption is processed through NFA's Exemption from registration under this Exemption System section must affirm on an annual basis the Person operates only one pool at any time.

4 Notice of Exemption from registration, (a)(1) (Pool level for Operator does not advertise, receive withdraw such Exemption due to the Exempt CPO) compensation and is not otherwise required cessation of activities requiring registration to be registered with the CFTC or Exemption therefrom, or withdraw such Exemption and apply for registration within Provide the following: Name, main business 60 days of the calendar year end through address, main business telephone, main NFA's Exemption System FAX number and main email address of person claiming Exemption . The name of the pool for which the Exemption is being claimed. Total gross capital contributions in all pools operated or intended to be operated do not Exemption is processed through NFA's Each person who has filed a notice of in the aggregate exceed $400,000 and Exemption System Exemption from registration under this none of the pools operated has more than section must affirm on an annual basis the 15 participants notice of Exemption from registration, (a)(2) (Pool level for Persons excluded from 15 participants: withdraw such Exemption due to the Exempt CPO) Provide the following: Name, main business cessation of activities requiring registration The pool's operator, CTA, principals and address, main business telephone, main or Exemption therefrom, or withdraw such any of their children, siblings or parents.

5 FAX number and main email address of Exemption and apply for registration within The spouse of any of these persons. Any person claiming Exemption . The name of 60 days of the calendar year end through relative of pool operator, CTA and principals the pool for which the Exemption is being NFA's Exemption System including a relative of a spouse who has the claimed. same principal residence. CFTC part 4 Exemption Easy Reference Guide Exemptions from CPO Registration Exemption Type Requirements How to File Annual Requirements Exemption provides relief from CPO. registration in cases where the pool trades only minimal amount of futures. With exception of investors, Exemption is processed through NFA's Each person who has filed a notice of participation restricted to accredited Exemption System Exemption from registration under this investors, a trust formed by an accredited investor for benefit of a family member, section must affirm on an annual basis the knowledgeable employees or QEP and pool notice of Exemption from registration, (a)(3) (Pool level for meets one of two tests (below).)

6 Withdraw such Exemption due to the Exempt CPO) cessation of activities requiring registration or Exemption therefrom, or withdraw such Two Tests: Exemption and apply for registration within 1. The aggregate initial margin and Provide the following: Name, main business 60 days of the calendar year end through premiums does not exceed 5% of the address, main business telephone, main NFA's Exemption System liquidation value of the pool's portfolio FAX number and main email address of 2. The aggregate net notional value of person claiming Exemption . The name of positions does not exceed 100% of the the Pool for which the Exemption is being liquidation value of the pool's portfolio (17 claimed. CFR part 45). CFTC part 4 Exemption Easy Reference Guide Exemptions from CPO Registration Exemption Type Requirements How to File Annual Requirements Provides relief to person acting as a director or trustee with respect to a pool whose Exemption is processed through NFA's operator is a registered CPO and is eligible Exemption System for relief under (c).

7 ( Exemption exclusive to ETF pools). Each person who has filed a notice of Exemption from registration under this section must affirm on an annual basis the notice of Exemption from registration, (a)(5) (Pool Level for Pool The person acts solely to comply with SEC withdraw such Exemption due to the rules and exchange listing requirements exempt under (c)) cessation of activities requiring registration that require the pool have an audit or Exemption therefrom, or withdraw such committee comprised of independent Exemption and apply for registration within directors or trustees Provide the following: Name, main business 60 days of the calendar year end through address, main business telephone, main NFA's Exemption System The person has no power or authority to FAX number and main email address of manage or control the operations or person claiming Exemption . The name of activities of the pool the pool for which the Exemption is being The registered CPO of the pool is and will claimed.

8 Be liable for any violation of the CEA or CFTC regulations by the person in connection with the person's serving as a director or trustee CFTC part 4 Exemption Easy Reference Guide Exemptions from CPO Registration Exemption Type Requirements How to File Annual Requirements Provides relief from CPO registration to an investment company under the Investment Company Act of 1940; a Business Development company that elected an Exemption from registration as an investment company under the Investment Exemption is processed through NFA's Company Act of 1940; an insurance Exemption System company subject to state regulations; a bank, trust or any other such financial depository institution subject to regulation; or a trustee of a name fiduciary or an employer maintaining a pension plan that is subject to ERISA. If the person claiming the exclusion is an Each person who has filed a notice of Investment Advisor, the notice of eligibility Exemption from registration under this must also contain representations that such section must affirm on an annual basis the person will operate the qualifying entity as notice of Exemption from registration, (Pool level for Exempt described in Rule (b)(1) for bona fide withdraw such Exemption due to the CPO) hedging purposes cessation of activities requiring registration or Exemption therefrom, or withdraw such Derivatives trading can not exceed 5% of Exemption and apply for registration within the liquidation value of the entity's portfolio 60 days of the calendar year end through NFA's Exemption System An alternative net notional test to determine Provide the following: Name of claimant, eligibility for exclusion from the definition of name of the qualifying entity (Fund) that the a CPO.

9 This test is similar to the test CPO intends to operate pursuant to currently in (a)(3) and permits entities exclusion to claim relief if the aggregate net notional values of the entity's commodity interest positions do not exceed 100% of the liquidation of the pool's portfolio. Will not be, and has not been, marketing participation to the public as or in a commodity pool or otherwise as or in a vehicle for trading in the commodity futures, commodity options, or swap markets CFTC part 4 Exemption Easy Reference Guide Exemptions from CTA Registration Exemption Type Requirements How to File Annual Requirements CTA who only provides advice to pools operating under a (a)(3) Exemption or Each person who has filed a notice of provides advice as a registered investment Exemption is processed through NFA's Exemption from registration under this adviser of exempt pools, which is Exemption System section must affirm on an annual basis the incidental to its securities advice and does notice of Exemption from registration, not otherwise hold itself out as a CTA withdraw such Exemption due to the (a)(8)(Firm level for CTA).

10 Cessation of activities requiring registration CTA whose trading advice is only or Exemption therefrom, or withdraw such Provide the following: Name, main business Exemption and apply for registration within incidental to the conduct of its cash market, address, main business telephone, main 60 days of the calendar year end through trade association or farm organization FAX number and main email address of the NFA's Exemption System business or registered AP or IB incidental to trading advisor claiming the Exemption IB business CFTC part 4 Exemption Easy Reference Guide Exemptions that provide relief to registered CPOs and/or CTAs from certain regulatory requirements Exemption Type Requirements How to File Annual Requirements Exemption is processed through NFA's Exemption CTA clients and pool participants must meet System definition in CFTC Regulation of "qualified (Firm level for CTA) (Pool eligible person." Registered CPO is provided relief No Annual Notice required level for CPO) CPO must select the pool for which the Exemption from certain financial, reporting and disclosure requirements.