On December 19, 2025, the Commodity Futures Trading Commission (CFTC) Market Participants Division issued No-Action Letter 25-50, providing interim relief from commodity pool operator (CPO) registration for managers registered with the Securities and Exchange Commission (SEC) as investment advisers, subject to specified conditions and requirements.
The relief is expressly interim, does not amend existing exemptions or exclusions, and requires careful consideration by both registered and exempt market participants.
Key Takeaways
- The relief applies to both prospective and current CFTC registrants.
- The no‑action position is provisional and does not amend existing exemptions or exclusions.
- No-Action Letter 25-50 is not self-executing; managers must continue to comply with all applicable CFTC rules unless and until the relief is claimed.
- SEC-registered investment advisers relying on existing exemptions should consider whether the provisional relief offers greater strategic flexibility.
- A special investor notice and redemption opportunity is not required, although managers should consult counsel about whether amendments to existing documentation are advisable.
Background
No-Action Letter 25-50 responds to a request from the Managed Funds Association (MFA) to reinstate Rule 4.13(a)(4), which, from 2003 until its rescission in 2012, generally allowed SEC-registered investment advisers to private funds with commodity interest exposure (which are considered “commodity pools” under CFTC regulation) whose investors were qualified eligible persons (QEPs) to avoid CFTC registration.
Although No-Action Letter 25-50 does not directly reinstate Rule 4.13(a)(4), it provides a path to CPO registration relief for SEC-registered investment advisers to commodity pools whose investors are QEPs pending a final rulemaking decision by the CFTC. The letter reflects CFTC staff’s recognition that certain private fund structures—particularly those with limited and incidental commodity interest activity, evolving cross‑border arrangements, or transitional portfolios—may face disproportionate compliance burdens under the CPO registration regime despite being subject to extensive regulatory requirements.
The no-action letter permits eligible managers to avoid registration, or to de-register for covered commodity pools, allowing time for potential rulemaking or staff guidance on a registration exemption for operators of vehicles with QEP investors. Under CFTC rules, QEPs generally fall into two categories: investors that qualify automatically by virtue of an enumerated regulatory status, and investors that satisfy specified portfolio requirements, such as meeting a $4 million asset test or a $400,000 margin account test.
Who Is Eligible and What Is Required
Although most CFTC no-action letters apply only to their petitioners, No-Action Letter 25-50 applies to all SEC-registered investment advisers acting as CPOs to one or more commodity pools that meet its terms.
To claim relief under No-Action Letter 25-50, a manager must:
- Be registered with the SEC as an investment adviser.
- Operate pools whose interests are exempt from Securities Act of 1933 registration and sold without U.S. public marketing or pursuant to Rule 506(c).
- Reasonably believe that each pool investor meets the definition of a QEP under CFTC Rule 4.7(a)(6) at the time of investment or when the manager relies on the relief.
- File a Form PF for all pools covered by the relief.
The CFTC will consider the request for relief effective upon filing by email with the Market Participants Division so long as it is materially complete. Notably, No-Action Letter 25-50 does not require a special investor notice or redemption opportunity.
The notice must include specified identifying information and representations, including a representation that neither the manager claiming relief nor any of its principals has a statutory disqualification that would require disclosure under Section 8a(2) of the Commodity Exchange Act if the manager were itself seeking CFTC registration. These representations are broadly similar to the information typically requested through a “bad actor” questionnaire and include matters such as felony convictions, significant regulatory violations, and market participation injunctions. The notice must also be filed by a person duly authorized to bind the manager seeking relief.
Under CFTC Rule 4.13(c), No-Action Letter 25-50 still requires relying managers to maintain books and records prepared for their CPO operations for five years and to keep those records readily accessible for at least two years.
The letter further states that staff will not act against a firm that chooses not to register, or that de-registers, as a commodity trading advisor (CTA) for any pool covered by the relief (though, notably, CPOs are likely exempt from CTA registration for the pools they operate under existing, self-executing relief).
The relief is expressly interim and may be withdrawn or superseded by future guidance or rulemakings, potentially requiring managers to register or re-register with the CFTC.
Interaction with Existing Exemptions and Exclusions
No‑Action Letter 25‑50 does not supersede, diminish, or expand existing exemptions or exclusions under Rule 4.13 or Rule 4.5. Rather, it provides an additional, staff‑level pathway to avoid registration pending further CFTC action.
All CFTC regulations generally applicable to participants in the commodities and commodity interest markets, including position limits and large-trader reporting requirements continue to apply. Managers relying on the relief may also receive calls to complete CFTC Form 40 (the large-trader questionnaire).
Implications for Registered and Exempt Managers
Investment managers currently registered with the CFTC should seek counsel before de-registering in reliance on No-Action Letter 25-50. The letter does not reinstate Rule 4.13(a)(4) and may be withdrawn at any time, potentially resulting in re-registration obligations if the relief is not formalized.
For managers relying on registration exemptions whose investors are QEPs, including investors in SEC 3(c)(7) vehicles, the relief may provide a practical and flexible alternative to the de minimis exemption. Because the relief does not impose a commodity interest exposure limit, it offers more portfolio flexibility than existing relief.
Managers that have traded spot virtual currency products in lieu of derivatives to keep their commodity interest exposure below the de minimis threshold may find the CFTC’s new relief convenient and appealing; it permits unlimited exposure to commodity interest derivatives. Similarly, managers of funds-of-funds that have been unable to rely on relief under CFTC No-Action Letter 12-38 due to position-level knowledge requirements should reassess their posture.
Although No-Action Letter 25-50 does not impose a special investor notice or redemption requirement, managers considering reliance on the new relief should consult counsel on whether amendments to existing documentation or associated investor communications may be advisable and should keep a copy of their No-Action Letter 25-50 notice on hand to respond to diligence requests from CFTC-registered counterparties, including brokers or futures commission merchants.
If you have any questions, or would like additional information, please contact one of the attorneys on our Investment Funds team.
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