Themes emerge in Criticism of Proposed Capital Requirements

Philadelphia partner Kay Gordon, Chicago partner David Matteson and Chicago associate Andrew Raby wrote an article titled, “Themes emerge in Criticism of Proposed Capital Requirements,” which was published in HFM Compliance.

The article discussed the industry comments received by the NFA (the self-regulatory organization for the futures industry) on its January, 23 2014 notice to its members proposing rule changes that would, among other things, impose capital requirements on commodity pool operators (CPOs) and commodity trading advisers (CTAs).

Any such requirement would have a significant impact on the private fund industry as the broad definitions of CPO and CTA include any private fund manager trading more than a de minimis amount of futures or swaps. While the organization is still collating the comments, it has unofficially confirmed to us that industry participants have made known their overwhelmingly negative reaction.