Dec 22, 2025 The Commodity Futures Trading Commission (CFTC) Market Participants Division (MPD) has issued Staff No-Action Letter No. 25-50, providing immediate registration relief for certain Commodity Pool Operators (CPOs) and Commodity Trading Advisors (CTAs). The letter, issued December 19, 2025, establishes a no-action position for managers whose pools are offered exclusively to Qualified Eligible Persons (QEPs). This relief addresses long-standing industry requests to reduce duplicative regulatory requirements for investment managers already registered with the Securities and Exchange Commission (SEC). Technical Eligibility Requirements To qualify for the no-action position and operate as a “QEP No-Action CPO,” an investment manager must meet several specific criteria outlined by the MPD: Registration Status: The manager must be registered with the SEC as an investment adviser. Investor Sophistication: Each pool participant must meet the QEP definition under Commission Regulation 4.7(a)(6). Offering Structure: Pool interests must be sold through non-public offerings (though offerings under Rule 506(c) are permitted). Reporting Obligations: The manager must continue to file Form PF with the SEC, which is then made available to the CFTC. Relief from Mandatory Redemption Requirements A critical component of Letter 25-50 is the confirmation that managers relying on this no-action position are not subject to the mandatory redemption offer requirements of Commission Regulation 4.13(e). Typically, when a registered CPO withdraws from registration to claim an exemption, they must offer all participants an automatic right to redeem their interests. The MPD recognized that for many private funds—particularly those with negotiated liquidity terms or illiquid assets—this requirement could be economically unfeasible. By removing this requirement for QEP-only pools, the CFTC has cleared the primary operational hurdle for firms looking to move to an exempt status. Interim Measure Pending Rulemaking This no-action position serves as an interim measure while the CFTC evaluates formal rulemaking to potentially reinstate the “QEP Exemption” (formerly Regulation 4.13(a)(4)), which was rescinded in 2012. The relief remains in effect until the Commission either promulgates new rules or publicly decides not to proceed with the reinstatement of the exemption. Firms intending to rely on this position must file a notice of interest via email to the Market Participants Division at mpdnoaction@cftc.gov. Strategic Considerations: To Register or Not? While Letter 25-50 provides a clear path to de-registration, the decision to exercise this relief is a strategic one that extends beyond mere regulatory compliance. Firms must evaluate whether maintaining a registered status serves their broader business objectives. In many cases, maintaining registration may be preferable. Institutional investors often have strict mandates requiring their managers to be fully registered and regulated by the CFTC and NFA. For these investors, registered status is viewed as a “higher bar” of oversight that includes proficiency requirements (Series 3), periodic NFA audits, and formal disclosure obligations. Furthermore, some firms use their registered status as a competitive marketing advantage to signal transparency and a commitment to a robust compliance culture. How Turnkey Trading Partners Can Help Before moving to withdraw your registration or forgo a new filing, it is essential to conduct a case-by-case evaluation of your investor base, side letters, and long-term marketing strategy. Turnkey Trading Partners is available to help you navigate these nuances. We can assist in determining if this relief is appropriate for your firm or if the benefits of remaining a registered CPO/CTA outweigh the costs of compliance. For help in this regard, contact us today.