The CFTC Division of Swap Dealer and Intermediary Oversight ("DSIO") granted no-action relief from registration to a commodity pool operator (the "Delegating CPO") in response to a request by the CPO to delegate responsibilities for operating multiple pools to another CPO (the "Designated CPO").

The Delegating CPO intends to allow the Designated CPO to serve as the registered CPO for several commodity pools. In accordance with CFTC No-Action Letter 14-126, to qualify for registration relief in such a scenario, the two CPOs would need to meet several criteria.

While the CPOs failed to meet the requirement that they be under common control with each other, the DSIO agreed to grant relief based on several factors, including that the CPOs are "jointly and severally liable" for violations of the CEA and CFTC rules.

Commentary / Steven Lofchie

Letter 14-126 should be revised to drop the common control requirement. The CFTC has previously granted relief from this requirement, and it does not seem to serve a material purpose.

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