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Extension of Time To File Annual Reports for Commodity Pools

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Information about this document as published in the Federal Register.

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Commodity Futures Trading Commission.


Final rules.


The Commodity Futures Trading Commission (“CFTC” or “Commission”) is adopting amendments to its rules to permit commodity pool operators (“CPOs”) to file a claim for an extension of time to file a pool's annual report where the pool is invested in other collective investment vehicles, and the CPO cannot obtain the information its accountant requires about the collective investment vehicles in time for the pool's Annual Report to be prepared, audited, and distributed by the due date.


December 26, 2000.

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Kevin P Walek, Assistant Director, (202) 418-5463, electronic mail: “,” Division of Trading and Markets, Commodity Futures Trading Commission, 1155 21st Street, NW., Washington, DC 20581.

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On November 7, 2000, the Commission proposed to amend its Rule 4.22 to permit CPOs to file a claim for an extension of time to file a pool's annual report where the pool is invested in other collective investment vehicles, and the CPO cannot obtain the information its accountant requires about the collective investment vehicles in time for the pool's Annual Report to be prepared, audited, and distributed by the due date.[1]

The 30-day comment period expired on December 7, 2000. The Commission received four comment letters, which generally supported the proposed rulemaking.

Two commenters expressed the concern that a CPO that has filed a notice claiming an extension of time to file should not be unnecessarily burdened by having to make the same Start Printed Page 81334claim in future years. One of these commenters suggested that, in the alternative, the Commission use language contained in prior staff no-action letters, which indicated that the Commission staff should be notified if there is a change in circumstances relating to the relief criteria. The Commission considered this approach in the proposed rule, recognizing the need to balance the burden of notification with the need to ensure that the entity still qualified for the relief. The rule does not require that the same claim be made in future years. Rather, the rule requires that the CPO simply confirm that the circumstances necessitating the relief continue to apply by restating the representations required by Rule 4.22(f)(2)(iv). Permitting the CPO to file the statement at the same time as the annual report minimizes the burden.

Two of the commenters requested that the Commission provide clarification of the procedure by which a CPO needing more than 150 days to complete an annual report could request an extension of time. A third commenter requested that the Commission consider increasing the permitted extension to 120 days, or 210 days following the fiscal year end.

Commission staff have reviewed past extension requests and found that a substantial majority of the requesters have indicated that they can complete their Annual Reports within 150 days of the end of the commodity pool's fiscal year. The new extension provisions in Rule 4.22(f)(2) are intended to provide a standardized and simplified extension procedure for this group of CPOs. Only a small number of past requests have exceeded the 150-day period. Therefore, in the unusual event that a CPO is not able to meet the requirements for this streamlined procedure, the CPO may request an extension of time pursuant to Rule 4.22(f)(1). In contrast to the procedures of Rule 4.22(f)(2), under which relief may be obtained automatically upon the filing of the required notice and representations, a request under Rule 4.22(f)(1) is not granted automatically, and must include detailed supporting documentation to justify the need for the extension. Additionally, Section 140.99 of the Commission's regulations provides a mechanism for obtaining relief in those cases that do not fall within the bounds set by Rule 4.22(f)(1) or (f)(2).

Finally, one commenter suggested that the Commission clarify that a CPO's claim for an extension of time is effective upon receipt of the claim by the CFTC. The word “claim” in the rule indicates that, if all the relevant criteria apply, the CPO needs only to file the specified notice to obtain the relief. Thus, a claim made pursuant to Rule 4.22(f)(2) is effective upon receipt.

The rule will be effective upon publication in the Federal Register.[2] It is the Commission's intention that CPOs may follow this revised rule in filing Annual Reports due to be filed in calendar year 2001 for fiscal years ending in 2000.

Related Matters

A. Regulatory Flexibility Act

The Regulatory Flexibility Act (“RFA”), 5 U.S.C. 601-611 (1994), requires that agencies, in proposing rules, consider the impact of those rules on small businesses. The Commission has previously established certain definitions of “small entities” to be used by the Commission in evaluating the impact of its rules on such entities in accordance with the RFA.[3] The Commission previously has determined that registered CPOs are not small entities for the purpose of the RFA.[4] In this regard, the Commission notes that it did not receive any comments regarding the RFA implications of the amendment to Rule 4.22(f).

B. Paperwork Reduction Act

This rule (Section 4.22(f)) contains information collection requirements. As required by the Paperwork Reduction Act of 1995,[5] the Commission has submitted a copy of this rule to the Office of Management and Budget (OMB) for its review.[6] In response to the Commission's invitation in the proposed rulemaking to comment on any potential paperwork burden associated with this regulation, no comments were received.

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List of Subjects in 17 CFR Part 4

  • Brokers
  • Commodity futures
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In consideration of the foregoing and pursuant to the authority contained in the Commodity Exchange Act and in particular sections 2(a)(1), 4l, 4m, 4n, 4o, and 8a, 7 U.S.C. 2, 6l, 6m, 6n, 6o, and 12(a), the Commission hereby proposes to amend Chapter I of Title 17 of the Code of Federal Regulations as follows:

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1. The authority citation for Part 4 continues to read as follows:

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Authority: 7 U.S.C. 1a, 2, 4, 6b, 6c, 6l, 6m, 6n, 6o, 12a, and 23.

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2. Section 4.22 is amended by:

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a. Redesignating paragraphs (f)(1) introductory text, (f)(1)(i), (f)(1)(ii), (f)(1)(iii), (f)(1)(iv), and (f)(1)(v) as (f)(1)(i) introductory text, (f)(1)(i)(A), (f)(1)(i)(B), (f)(1)(i)(C), (f)(1)(i)(D), and (f)(1)(i)(E);

b. Redesignating paragraphs (f)(2) introductory text, (f)(2)(i), and (f)(2)(ii) as (f)(1)(ii) introductory text, (f)(1)(ii)(A), and (f)(1)(ii)(B);

c. Redesignating paragraphs (f)(3) introductory text, (f)(3)(i), and (f)(3)(ii) as (f)(1)(iii) introductory text, (f)(1)(iii)(A), and (f)(1)(iii)(B); and

d. Adding a new paragraph (f)(2) to read as follows:

Reporting to pool participants.
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(f) * * *

(2) In the event a commodity pool operator finds that it cannot obtain information necessary to prepare certified financial statements for a pool that it operates within the time specified in either paragraph (c) of this section or § 4.7(b)(3)(i), as a result of the pool investing in another collective investment vehicle, it may claim an extension of time under the following conditions:

(i) The commodity pool operator must, within 90 calendar days of the end of the pool's fiscal year, file a notice with National Futures Association and the Commission, except as provided in paragraph (f)(2)(v) of this section.

(ii) The notice must contain the name, main business address, main telephone number and the National Futures Association registration identification number of the commodity pool operator, and name and the identification number of the commodity pool.

(iii) The notice must state the date by which the Annual Report will be distributed and filed (the “Extended Date”), which must be no more than 150 calendar days after the end of the pool's fiscal year. The Annual Report must be distributed and filed by the Extended Date.

(iv) The notice must include representations by the commodity pool operator that:

(A) The pool for which the Annual Report is being prepared has investments in one or more collective investment vehicles (the “Investments”); Start Printed Page 81335

(B) The commodity pool operator has been informed by the certified public accountant selected to audit the commodity pool's financial statements that specified information establishing the value of the Investments is necessary in order for the accountant to render an opinion on the commodity pool's financial statements. The notice must include the name of the accountant; and

(C) The information specified by the accountant cannot be obtained in sufficient time for the Annual Report to be prepared, audited, and distributed before the Extended Date.

(v) For each fiscal year following the filing of the notice described in paragraph (f)(2)(i) of this section, the commodity pool operator may claim the extension of time by filing a statement containing the representations specified in paragraph (f)(2)(iv) of this section, at the same time as the pool's Annual Report.

(vi) Any notice or statement filed pursuant to paragraph (f)(2) of this section must be signed by the commodity pool operator in accordance with paragraph (h) of this section.

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Issued in Washington, D.C., on December 20, 2000 by the Commission.

Jean A. Webb,

Secretary of the Commission.

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1.  65 FR 66663 (November 7, 2000).

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2.  This rule amendment establishes a mechanism to obtain an exemption from the current temporal requirements of Rule 4.22(f). Accordingly, this rule amendment may be made effective less than 30 days after its publication herein. See 5 U.S.C. 553(d)(1).

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3.  47 FR 18618-18621 (April 30, 1982).

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4.  47 FR 18619-18620.

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5.  Pub. L. 104-13 (May 13, 1995).

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[FR Doc. 00-32856 Filed 12-22-00; 8:45 am]