Financial Institutions Alert: CFTC Issues Harmonization Scheme, Permits 'Substitute Compliance'

On August 13, the CFTC adopted final rules setting forth a harmonization scheme that would apply to mutual funds and closed-end funds (RICs) that participate in commodity investments (e.g., futures and most swaps) beyond a de minimis trading level or that market themselves as participating in commodity investments. Sponsors, distributors and/or managers of these non-exempt funds were required to register with the CFTC as a Commodity Pool Operator (CPO) by December 31, 2012. However, these CPOs' disclosure, recordkeeping and reporting obligations were suspended pending the CFTC's adoption of proposals seeking to harmonize the CFTC and SEC compliance schemes applicable to CPOs of RICs.