“To exempt charitable organizations from commodity trading regulations and registration requirements.”
No CRS summary available for this bill.
This section rewrites Section 4m of the Commodity Exchange Act (7 U.S.C. 6m), which requires commodity trading advisors (CTAs, i.e., persons advising on commodity interests such as futures and swaps) and commodity pool operators (CPOs, i.e., persons operating pools trading such interests) to register with the Commodity Futures Trading Commission (CFTC) unless exempt, to add a new exemption from such registration for qualified charitable organizations. The exemption applies to (1) a charitable organization as defined in section 3(c)(10)(D) of the Investment Company Act of 1940 (15 U.S.C. 80a-3(c)(10)(D)), or a trustee, director, officer, employee, or volunteer acting within scope, whose CTA or CPO activities are solely on behalf of or with respect to such organization or an investment trust excluded from investment company status under ICA section 3(c)(10); and (2) any ICA section 3(c)(14) plan, company, account, or related person (e.g., trustee), whose activities are solely on behalf of or with respect to an ICA 3(c)(14)-excluded investment trust. (Thus, such entities may provide commodity trading advice or operate commodity pools solely for qualifying charitable purposes without CFTC registration.) The section retains exemptions for small CTAs (advising no more than 15 persons in the prior 12 months and not holding out generally to the public), incidental advisors (certain pre-1974 cash commodity dealers/processors/brokers/sellers and nonprofit farm organizations), and SEC-registered investment advisers not primarily acting as CTAs and not advising primarily commodity-trading pools (with new definitions of "engaged primarily" and "commodity interests," i.e., futures, options, security futures, swaps, etc.); subjects incidental and charitable exempt persons to CEA section 14 proceedings; preserves securities law applicability; and requires charitable exempt CTAs/CPOs advising certain ICA 3(c)(10)(B) enterprises to provide disclosures under ICA section 7(e) (15 U.S.C. 80a-7(e)).