On Dec. 19, 2025, the Commodity Futures Trading Commission (CFTC) Market Participants Division staff issued a no-action letter providing interim staff relief analogous to the former Regulation 4.13(a)(4) (the Qualified Eligible Person or QEP Exemption), pending consideration of the potential reinstatement of the QEP Exemption by the Commission. This relief also clarifies that commodity trading advisor (CTA) registration is not required for CPOs relying on this exemption.
What This Means for Investment Advisers and Private Funds
- Investment advisers launching private funds offered solely to QEPs (including qualified purchasers under the Investment Company Act of 1940) are not required to register as CPOs or CTAs, provided they satisfy the no-action relief’s conditions.
- Existing CPOs/CTAs may withdraw from CFTC registration if they qualify, and notably, sponsors who rely on the relief are not required to offer investors a right of redemption—removing a significant regulatory burden.
- Advisers who currently use other CPO exemptions (like the de minimis exemption under Reg. 4.13(a)(3)) may be able to rely on this more flexible relief, allowing for increased use of futures and swaps without “de minimis” restrictions.
Conditions for No-Action Relief
- Adviser must be SEC-registered and file Form PF for covered funds; relief is not available to exempt reporting advisers or SEC-registered advisers that do not file Form PF.
- Interests in the commodity pool must be exempt from registration under the Securities Act of 1933 and not publicly marketed (except Rule 506(c) offerings).
- The adviser must reasonably believe all investors meet the QEP definition under CFTC Regulation 4.7(a)(6).
- Notice filing to CFTC Staff via [email protected] and annual affirmation of qualification for relief are required.
It should be noted that this is a staff no-action position by the CFTC’s Market Participants Division. It is not a Commission rule or order, binds only MPD staff, may be modified or withdrawn, and is intended as an interim measure until the Commission adopts (or declines to adopt) rules addressing reinstatement of the QEP exemption.
Key Points for Sponsors of 3(c)(7) Funds
- The relief is particularly valuable for sponsors of 3(c)(7) funds, enabling greater flexibility in structuring and managing private fund products for sophisticated investors.
For full details, see the CFTC’s no-action letter: https://www.cftc.gov/csl/25-50/download.
Takeaway
This relief, if adopted, offers substantial regulatory flexibility for SEC-registered advisers managing private funds for QEPs. Sponsors can streamline compliance, expand fund trading strategies and products, and reduce operational burdens
For questions on how this development may affect your fund or adviser registration status, please contact our CBIZ Alternative Investment Group
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