CFTC Allows Consolidated CFC Reporting but Firms Must Make Filing
The Commodity Futures Trading Commission has granted no action relief from certain reporting obligations for registered funds that trade in commodities through wholly-owned controlled foreign corporations. The CFTC will allow such registered funds to report on a consolidated basis for purposes of Section 4.27(c), rather than separate out the activities of the CFCs. The CFTC will also allow the filing of consolidated financial statements under Section 4.22(c) rather than break out the financials of the CFCs. Most significantly, the relief requires a commodity pool operator to make a filing to benefit from this relief.
OUR TAKE: This is the right result as it would not benefit anybody to force fund managers to create separate financials and filings for wholly-owned CFCs. We think that the CFTC should have made the relief self-executing, though, as this type of technical compliance invites mistakes.