CFTC Adopts Final Rules Requiring CPO Registration by Certain Hedge Fund and Private Equity Fund Managers

In final rules (the “Final Rules”) recently adopted by the Commodity Futures Trading Commission (the “CFTC”), the CFTC has withdrawn an exemption from registration as a commodity pool operator (“CPO”) that has been widely relied upon by managers of hedge funds and private equity funds that engage in futures transactions for hedging and other investment objectives. The Final Rules also extend the now expanded CPO registration requirement to fund operators that use swaps, in addition to futures contracts.

As a result of these changes, the managers of funds that engage in more than narrowly prescribed futures and/or swaps activities will need to register with the CFTC as a CPO and become a member of the National Futures Association (the “NFA”) by December 31, 2012. A fund manager who plans to launch any such fund after April 24, 2012 will also need to consider whether it must register prior to launching the fund.

The attached memorandum provides a more detailed summary of the Final Rules and their implications.