A new rule has been approved by the Commodities Futures Trading Commission (CFTC) relieving some of the restrictions and requirements for commodity pool traders. Commodity exchange traded fund (ETF) sponsors may finally get a timelier turn around for approval and procedures.
“We believe this procedure will eliminate time delays in issuing such relief and the burden on the [CFTC’s] staff to evaluate commodity ETFs on a case-by-case basis. Public investors who seek to diversify into commodities through these highly regulated and transparent commodity ETFs will benefit from the efficiency of the routinized exemptive relief and the elimination of the costs of case-by-case relief,” says Martin Kremenstein, COO at DB Commodity Services, in an October 13 comment letter on the proposed rule.
Ultimately, certain commodity ETFs would be granted exemption from CFTC document delivery rules if they make the funds disclosure documents available via the website. Commodity ETF sponsors say the new protocol will save providers and investors time and money when launching a new product, reports Jackie Noblett for Ignites. [CFTC Could Impede Growth of Commodity ETFs.]
Prior to the latest rules, the commodity pool operators had to get CFTC’s relief on disclosure document delivery, monthly account reporting and record keeping guidelines under the Commodity Exchange Act. As of now, ETF sponsors seeking to launch equity and fixed income products under the old 40’s Act expect to wait one year or more to get the required approval from the SEC.[A Surge in Commodity Prices?…ETFs Didn’t Do It!]
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.