CFTC No-Action Relief from Commodity Pool Operator Registration for Private Fund Managers

December 23, 2025

What happened?

On December 19, 2025, the Commodity Futures Trading Commission’s Market Participants Division (“MPD”) announced a no-action letter stating the MPD will not recommend the CFTC initiate an enforcement action against firms registered as investment advisers with the Securities and Exchange Commission (“SEC”), who operate commodity pools privately offered solely to sophisticated investors known as qualified eligible persons (“QEPs”), for failing to register as a commodity pool operator, subject to certain conditions. The no-action letter was a response to the Managed Fund Association, which sought regulatory harmonization between the SEC and CFTC and the removal of regulatory redundancies.

Background of the Qualified Eligible Person Exemption

The CFTC originally adopted Rule 4.13(a)(4) (the “QEP Exemption”) in 2003 to encourage participation in the commodity interest markets by collective investment vehicles and their advisers and to increase liquidity for all market participants. The QEP Exemption from commodity pool operator (“CPO”) registration was designed for investment managers that manage private funds that are offered solely to sophisticated, often institutional, investors and already face the regulatory requirements of SEC registration.

The QEP Exemption provided an exemption from registration as a CPO with respect to certain privately offered commodity pools whose investors were limited to QEPs. QEPs include (i) “qualified purchasers,” as defined in the Investment Company Act, (ii) “knowledgeable employees” as defined in the Act, and (iii) certain other categories of investors.

In 2012, as part of the market risks addressed by the Dodd-Frank Act, risks seen for private funds were also presented by commodity pools.  To provide more information to address those risks, the QEP Exemption was rescinded. Registration of previously exempt CPOs and reporting on Form PF both became required.

The CFTC has said it is presently considering reinstating the QEP Exemption through a formal rulemaking. The no-action letter grants immediate relief while the future of the QEP Exemption is being considered.

Conditions of No-Action Letter Relief

Under the letter, enforcement action would not be recommended for any person that fails to register or withdraws from registration as a CPO, who is or would be required to be registered with the Commission as a CPO for its commodity pool operations, under the current rule, or relies upon an existing exemption within the rule, subject to the following conditions:

1. The person is registered with the SEC as an investment adviser;
2. The interests of the pool operated by the person are exempt from registration under the Securities Act and sold without marketing to the public in the United States (provided, that the prohibition on marketing to the public shall not apply to a 506(c) offering);
3. The person reasonably believes at the time of investment, or at the time of relying on this no-action relief, that each pool participant meets the QEP definition;
4. The person files a Form PF with respect to the pool(s) covered by the no-action relief;
5. The person files a notice via email to the CFTC (mpdnoaction@cftc.gov) to document reliance on the no-action letter.

What does this mean for me?

This is another example of a pro-industry approach to rule enforcement. The no-action letter relief for the QEP exemption comes on the heels of no-action letter relief for custody of crypto assets.  The new no-action letter also grants a relaxation of regulatory obligations for private fund managers who already saw no-action letter relief for 506(c) exemptions in March of 2025. This relief also comes before the CFTC determined the path of any formal rulemaking, rather than asking advisers to wait for relief until a formal rulemaking is completed.

This result could also lead to industry groups paying closer attention to SEC roundtable events. The efforts to gain no-action letter relief here followed a joint roundtable of SEC and CFTC commissioners that showed agreement on the need for regulatory harmonization. The Managed Fund Association submitted its request in September, and four months later, the MPD of the CFTC granted this relief while the CFTC considers further rulemaking.

We will continue to monitor regulatory updates and new developments that impact investment advisors. If you have questions, contact us. Fairview is here to help.