CFTC Opens Comment Period on CPO and CTA Exemptions for Some SEC-Registered Advisers

Aim is to reduce overlapping regulation

The CFTC said the proposal is designed to address duplicate compliance burdens that can arise when SEC-registered advisers manage private funds that trade futures, options, swaps, or other commodity interests. In those cases, advisers can be pulled into both SEC oversight and the CFTC registration framework for commodity pool operators, or CPOs, and commodity trading advisers, known as CTAs.

According to the commission, full registration under both systems may impose overlapping duties without enough added regulatory benefit. Chairman Michael S. Selig said the agency was seeking to reduce unnecessary compliance costs while preserving market integrity and competitiveness.

The proposed exemption would not remove SEC obligations. Advisers relying on it would still need to comply with the Investment Advisers Act, including applicable conduct, disclosure, examination, and reporting requirements.

Exemption would be limited to certain private pools

The proposed new CPO exemption, Regulation 4.13(a)(4), would apply only to SEC-registered investment advisers operating eligible commodity pools for defined categories of sophisticated investors. For natural persons, participants would generally need to fit Qualified Eligible Person categories that do not require use of the CFTC portfolio test. Eligible entities could include QEPs and certain accredited investors under SEC Regulation D.

The proposal does not rewrite the financial thresholds for QEP status. Instead, it uses existing investor categories to decide which pools could qualify for relief. The CFTC noted that it had already raised some QEP portfolio thresholds in 2024, doubling them from $2 million to $4 million in securities and other assets and from $200,000 to $400,000 in required margin and option premiums, with a combination test also available.

Other conditions would keep the exemption focused on privately offered funds. Interests in the pool would need to remain exempt from Securities Act registration, and public marketing in the United States would generally be restricted. One exception would permit general solicitation under Rule 506(c) when every purchaser is an accredited investor and the issuer takes reasonable steps to verify that status.

Form PF and notice filings would still be required

The CFTC said advisers would still have to meet specific filing conditions to use the exemption. If an eligible private fund is required under SEC rules to file Form PF, the adviser would also need to submit that form in order to claim CFTC relief. The commission said its information-sharing arrangement with the SEC could allow regulators to keep access to fund data without requiring duplicate reporting directly to both agencies.

Firms would also need to file an exemption notice through the National Futures Association's online registration system. Annual notices would be required to confirm continued reliance on the exemption, and advisers would have to update information if prior filings become inaccurate or incomplete.

A related amendment to Regulation 4.14 would provide CTA registration relief for qualifying advisers serving pools covered by the proposed CPO exemption. The CFTC described that CTA change as limited, noting that many affected advisers already qualify for relief in other circumstances.

Proposal would replace temporary staff relief and lift small-pool cap

The rulemaking would move parts of existing no-action relief into the formal regulations. In December 2025, CFTC Market Participants Division Letter 25-50 gave interim registration relief to certain SEC-registered advisers managing pools limited to QEPs and allowed some eligible firms to withdraw registrations. The new proposal says operating under that letter together with National Futures Association processes has proved complex and time-consuming.

If adopted, a final rule would supersede specified staff letters, including Letters 25-50 and 26-06. Until then, the proposal itself does not change the current framework or replace those letters.

Separately, the CFTC wants to raise the small-pool exemption threshold in Regulation 4.13(a)(2) from $400,000 to $800,000. The exemption would still be limited to operators with no more than 15 participants across a pool, and existing exclusions from the contribution calculation would remain in place. The commission said the current dollar limit was last updated in 2003 and estimated that $400,000 at that time had purchasing power of about $735,097 in July 2026, making an $800,000 cap a simpler rounded figure. Initial and annual notice filings, as well as anti-fraud provisions of the Commodity Exchange Act, would still apply.

What comes next

The proposal does not create a registration regime for cryptocurrency platforms and does not alter the CFTC's authority over digital-asset spot markets. Crypto-focused private funds could still be affected if their trading activity causes them to be treated as commodity pools, but the same eligibility conditions would apply as for other funds.

For this rulemaking, the commission is seeking public input on the exemptions, the proposed eligibility standards, expected costs and benefits, and the increase in the small-pool threshold. Written comments must reference RIN 3038-AF61 and be submitted within 45 days after the proposal is published in the Federal Register.