On December 19, 2025, one day after the U.S. Senate confirmed Michael Selig as the new Chairman of the Commodity Futures Trading Commission (the “CFTC”), the staff of the Market Participants Division (the “Division”) of the CFTC issued a no-action letter (the “No-Action Letter”) establishing conditions under which certain qualifying private fund managers do not need to register, or stay registered, as a commodity pool operator (“CPO”) with the CFTC. In the No-Action Letter, the Division staff found that a no-action position is warranted as an interim measure to reduce the burdens on certain private fund managers to institutional and high net worth investors while the CFTC considers whether to formally reinstate the “QEP Exemption” previously set forth in CFTC regulation 4.13(a)(4) and rescinded by the CFTC in 2012. The QEP Exemption was an exemption from registration with the CFTC as a CPO available to investment managers that managed private funds that were offered solely to sophisticated investors that were qualified eligible persons (“QEPs”), as defined in CFTC regulation 4.7. Unlike the de minimis exemption from CPO registration set forth in CFTC regulation 4.13(a)(3), the QEP Exemption did not impose commodity interest trading limits on investment managers.

Under the No-Action Letter, until such time as the CFTC promulgates rules, or publicly determines not to promulgate rules, addressing the reinstatement of the QEP Exemption, the Division staff will not recommend that the CFTC commence enforcement action against any person that (A) fails to register with the CFTC as a CPO or (B) withdraws from registration with the CFTC as a CPO, provided such person satisfies the following conditions:

• The person is currently, or would be, until such time as the CFTC may promulgate regulations to reinstate the QEP Exemption, required to be registered with the CFTC as a CPO for its commodity pool operations, or relies upon an existing exemption from such CPO registration in CFTC regulation 4.13;
• The person is registered with the Securities and Exchange Commission (the “SEC”) as an investment adviser;
• The interests of the pool (i.e., private fund) operated by the person are exempt from registration under the Securities Act of 1933 and sold without marketing to the public in the United States (provided, that the prohibition on marketing to the public shall not apply to a pool that is also offered pursuant to general solicitation under SEC Rule 506(c));
• The person reasonably believes at the time of investment, or at the time of relying on the position in the No-Action Letter, that each pool participant is a QEP;
• The person files a Form PF with the SEC with respect to the pool(s) covered by the position in the No-Action Letter, which is received by the CFTC;
• The person complies with the notice requirements of CFTC regulations 4.13(b) (except paragraph (b)(2)) and 4.13(c) as if reliance on the position in the No-Action Letter were an exemption from registration under CFTC regulation 4.13(a), with the exception that notices documenting reliance on the position in the No-Action Letter are filed via email to mpdnoaction@cftc.gov. So long as such notice is materially complete, it should be considered effective upon emailing to the Division.

Similarly, solely with respect to the pools for which the person qualifies for the position in the No-Action Letter, the Division staff confirmed that it will not recommend that the CFTC commence an enforcement action against such person if such person fails to register, or withdraws from registration, as a commodity trading advisor (“CTA”).

In addition, solely with respect to the pools for which the person is relying on the position in the No-Action Letter, the Division staff confirmed that such person would not be required to provide each existing participant in such pools with the right to redeem the participant’s interest in the pool(s) in accordance with the requirements of CFTC regulation 4.13(e)(2) as a result of relying on the position in the No-Action Letter.

Private fund managers should ensure they meet all the conditions outlined in the No-Action Letter before deciding to rely on the relief from registration as a CPO (and, if applicable, a CTA) provided in the No-Action Letter. Please contact an attorney in the Investment Management Group at Seward & Kissel LLP if you have any questions regarding the No-Action Letter or need assistance with the foregoing analysis.