MFA submits letter to CFTC requesting QEP dual registration no action relief

MFA submitted a letter to the CFTC that the CFTC Staff issue exemptive relief pursuant to CFTC Rule 4.12(a) permitting private funds, subject to various conditions, to withdraw from CPO and CTA registration in anticipation of formal rulemaking to reinstate the QEP Exemption.

MFA recommends that the Commission Staff exempt from CPO registration QEP Managers (again, SECregistered investment managers offering pool interests solely to QEPs through a nonpublic offering) in anticipation of formal rulemaking to reinstate the QEP Exemption. A QEP Manager claiming this exemption from CPO registration would also be eligible for exemption from CTA registration under CFTC Rule 4.14(a)(5).

A summary of our arguments to permit the withdrawal from CPO and CTA registration for QEP Managers is that:

• Exemptive relief permitting QEP Managers to withdraw from CPO and CTA registration would eliminate duplicative, overlapping regulation and is wholly aligned with the Administration's efforts in this regard
• The policy goals furthered by permitting withdrawal from CPO and CTA registration for QEP Managers recognizes the sophistication of QEP investors and better harmonize regulation with the SEC, thereby reducing unnecessary expenses and burdens
• The policy arguments to rescind the QEP Exemption either have been disproven over time, have been addressed through other regulations, or simply do not withstand scrutiny.

Permitting QEP Managers to withdraw from CPO and CTA registration would:

• Improve the efficiency and the integrity of the commodity and financial markets
• Lower costs for investors and market participants thereby promoting liquidity in the commodity interest markets and facilitating hedging activities for investors
• Streamline federal regulations and eliminate unnecessary and overreaching regulations
• Reduce waste, promote innovation, and enhance American competitiveness.