Sophisticated Investor Funds – Page 3 – Global Investment Law Watch

New Year, New CPO/CTA Exemption Affirmations and CPO FinCEN Requirements

Jan 03 2024

By: Clifford C. Histed, Kenneth Holston, Cheryl L. Isaac, and Matthew J. Rogers

Happy New Year! As we kick off 2024, we note that the National Futures Association (NFA) published its annual Notice to Members with guidance on the annual affirmation requirement for certain exempt commodity pool operators (CPOs) and commodity trading advisors (CTAs). If you rely on an exemption or exclusion from CPO registration under CFTC Regulation 4.13(a)(1), 4.13(a)(2), 4.13(a)(3), 4.13(a)(5) or 4.5, or an exemption from CTA registration under 4.14(a)(8), you must file an annual affirmation in the NFA’s Exemptions System by 29 February 2024, and a multi-factor authentication is now required for access. Failure to make this affirmation will result in your registration exemption being withdrawn on 1 March 2024.

In addition, the NFA also issued a Notice to Members regarding the Financial Crimes Enforcement Network (FinCEN) final rule implementing the Corporate Transparency Act beneficial ownership information (BOI) reporting requirements. Although CFTC-registered entities (including CPOs and CTAs) are exempt from these requirements (see 31 U.S.C. §5336(a)(11)(B)(xiv)), certain pooled investment vehicles will be required to comply. Commodity pools that are operated or advised by an SEC-registered broker-dealer or investment adviser are generally exempt, but a limited number of other commodity pools will be subject to the new rule.

Accordingly, CPOs with non-exempt commodity pools will need to file BOI reports with FinCEN, including identifying information about individuals who directly or indirectly own or control the commodity pool. FinCEN recently extended the BOI reporting deadline for certain reporting companies, with the relevant compliance dates as follows:

Commodity pools created or registered before 1 January 2024: file BOI reports by 1 January 2025.
Commodity pools created or registered in 2024: file BOI reports within 90 calendar days after registration is effective.
Commodity pools created or registered on or after 1 January 2025: file BOI reports within 30 calendar days after registration is effective.

For commodity pools created or registered after 1 January 2024, a CPO will also need to report information about the “company applicants,” meaning the individual or individuals who directly file the document that creates or registers the commodity pool.

Please feel free to contact the authors of this blog post with any questions.

ICMA’s Code of Conduct for ESG Ratings and Data Products Providers – A Step Towards Consistent Global Standards

Dec 18 2023

By: Carolyn Sng and Yeu Sook Young

The International Capital Market Association (ICMA) has released a voluntary code of conduct for ESG ratings and data products providers (the Code), reflecting recommendations by the International Organization of Securities Commissions (IOSCO). The Code is intended to be internationally interoperable and may be used by jurisdictions where no local code or regulation is in place.

Australia: Proposed Licensing Exemptions for Foreign Financial Services Providers (FFSPs) Before Parliament

Dec 15 2023

By: Jim Bulling and Laura McFadzean

On 30 November 2023, the Australian Government tabled a Bill proposing Australian Financial Services Licence (AFSL) exemptions for FFSPs in Australia.

CFTC Proposes Highly Anticipated Guidance on Voluntary Carbon Credit Derivatives

Dec 05 2023

By: Cheryl Isaac and Wiley Cole

On 4 December 2023, the Commodity Futures Trading Commission (CFTC) proposed guidance on the listing of voluntary carbon credit (VCC) derivative contracts. The proposal outlines how designated contract markets (DCMs), which are CFTC-registered derivatives exchanges, may list VCC derivative contracts while complying with statutory “Core Principles” set forth in the Commodity Exchange Act (CEA) and applicable CFTC rules and regulations.

Australia: ASIC to Focus on Net Zero Statements and Targets

Dec 04 2023

By: Lisa Lautier and Dhivya Kalyanakumar

On 21-22 November 2023, the Australian Securities & Investments Commission (ASIC) hosted the ASIC Annual Forum with a focus on ‘navigating disruption’. With heightened geopolitical uncertainty and market volatility, ASIC outlined its key focus areas for 2024:

EUROPE: New Screening Criteria for the EU Taxonomy’s Environmental Objectives

Nov 27 2023

By: Áine Ní Riain and Gayle Bowen

Following their adoption and publication in draft form by the European Commission last June, two new EU Taxonomy delegated acts were published in the Official Journal on 21 November, and will apply from January 2024. They confirm new and amended technical screening criteria (TSCs) in relation to the environmental objectives in the Taxonomy Regulation. This is a significant build-out in the application of the Taxonomy Regulation given that for an economic activity to be taxonomy-aligned, it must:

Hong Kong Relaxes “Double Dipping” Restrictions For Large IPOs

Nov 27 2023

By: Carolyn Sng and Vincent Tso

The Stock Exchange of Hong Kong (HKSE) has introduced a new exemption to its “double dipping” rule for large IPOs. “Double dipping” refers to a subscription by an existing shareholder (including pre-IPO investors and cornerstone investors) or its close associate for further shares in the IPO, which is restricted by the HKSE on account of the actual or perceived preferential treatment by the issuer for its existing shareholders. This new exemption permits “double dipping” subject to certain size conditions being met, and is effective with immediate effect on 21 November 2023.

Australia: Quality of Advice (QAR) Recommendations Partly Addressed

Nov 20 2023

By: Jim Bulling and Laura McFadzean

On 14 November 2023, the Australian Government released what is described as the first of three tranches of proposed draft legislation implementing the QAR recommendations.

While the government is still saying it intends to address the remaining recommendations of the QAR, there were no commitments given at this stage.

Australia: ASIC Releases Second Report On Reportable Situations Regime

Nov 03 2023

By: Matthew Watts and Rebecca Mangos

The Australia Securities and Investments Commission (ASIC) has released its second report on information lodged under the reportable situations regime for the period 1 July 2022 to 30 June 2023.

Hong Kong Backs Industry-led Voluntary Code for ESG Ratings and Data Products Providers

Nov 02 2023

By: Carolyn Sng and Yeu Sook Young

The Securities and Futures Commission in Hong Kong (SFC) has announced its support for the development of a voluntary code of conduct (VCoC) for ESG ratings and data products providers. The proposed VCoC, which will be open for ESG ratings and data products providers to sign up voluntarily, and will align with international best practices as recommended by the International Organization of Securities Commissions.

Catagory:Sophisticated Investor Funds