Assessing the practical implications of derivatives regulations for investment advisers and investment funds of: position limits and aggregation rules, uncleared swaps margin rules, etc.

Since the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) more than five years ago, the US Commodity Futures Trading Commission (CFTC) and other regulators have finalized several rulemakings applicable to investment managers that qualify as commodity pool operators (CPOs) and commodity trading advisors (CTAs). Investment managers — including those of private funds (i.e., funds relying on 3(c)(1) or 3(c)(7) for exemption from registration as an investment company under the Investment Company Act) — that transact in derivatives should already be familiar with the general scheme of the CFTC’s registration requirements and exemptions for CPOs and CTAs and aware of their own CPO and/or CTA status. Certain other key derivatives rulemakings are, however, on the horizon, which will likely have further practical implications for investment advisers and the funds that they manage.