CFTC Update: New CPO-PQR Filing Requirements

On May 26, 2021, the Market Participants Division of the Commodity Futures Trading Commission (“CFTC”) published updated responses to its frequently asked questions (“FAQs”) regarding Form CPO-PQR. The new FAQs were mandated, and reflect changes brought on, by the CFTC’s final rule on Form CPO-PQR (the “Final Rule”), which was adopted in October 2020. The new FAQs replace the 2015 FAQs, but like the 2015 FAQs, are not meant to create new regulations or compliance requirements.


Brief History

Shortly after Form PFs were introduced by to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFTC adopted Form CPO-PQR to oversee commodity pool (“Pool”) operators (“CPOs”) and to identify holding trends. After more than seven years of requiring CPOs to file Form CPO-PQR, the CFTC determined that the Form CPO-PQR is not as useful as originally thought. The Final Rule and new FAQs are rooted in this CFTC’s decision.


Final Rule and FAQs

Among other changes, the Final Rule decreases CPOs CFTC reporting requirements. For example, the Final Rule eliminates the large, medium and small threshold and timing differentiations, and instead, CPOs with any amount of assets under management now file every quarter.

  1. National Futures Association (“NFA”) Form PQR or Form CPO-PQR? The CFTC now permits CPOs to file NFA Form PQR instead of the Form CPO-PQR.
  2. Form PF: CPOs that are registered as an investment advisers with the Securities and Exchange Commission (“SEC”) are no longer permitted to file Form PF in lieu of the Form CPO-PQR. Also, a CPO that is an SEC registered investment adviser that files Form PF is not excused from filing NFA Form PQR.
  3. Pools exempt by 17 CFR 4.13(a)(3): Neither the CFTC nor the NFA require Pools exempt under 17 CFR 4.13(a)(3) to be included in Form CPO-PQR or in NFA Form PQR, respectively. However, the NFA does require a CPO to “report ‘total net assets under management of all the commodity Pools operated by the CPO as of the reporting date,’ which does include excluded or exempt Pools.”
  4. Accounting standard: CPOs are generally required to use U.S. generally accepted accounting principles. However, under certain exceptions, they can use alternative accounting standards.
  5. Fund of fund assets: “Subject to certain exceptions, reporting CPOs may continue to disregard any Pool’s equity investments in other Pools in completing Form CPO-PQR, provided that the reporting CPO does so consistently.”
  6. Submission of assumptions: There is no method for a CPO to submit assumptions regarding its responses on Form CPO-PQR. CPOs are advised to “maintain in their records documentation regarding any assumptions made in completing Form CPO-PQR for their operated Pools.”

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