Commodity Investments Resource Center

The Investment Company Institute and the U.S. Chamber of Commerce filed a legal challenge to the Commodity Futures Trading Commission’s (CFTC) recent changes to its Rule 4.5, which governs registration of commodity pool operators (CPO). The CFTC’s amendments to Rule 4.5 are unnecessary, because the CFTC has not demonstrated a need for additional regulation of registered investment companies—such as mutual funds and exchange traded funds (ETFs)—and their advisers. They are also redundant, because of the layer of regulation added on top of the Securities and Exchange Commission’s (SEC) robust regulatory regime. Finally, the changes are costly, because ultimately funds and their investors will pay for these additional regulatory burdens in higher costs.

In the complaint filed with the U.S. District Court for the District of Columbia, ICI and the Chamber charge that the CFTC’s amendment of Rule 4.5 was arbitrary and capricious, and that the CFTC violated the Administrative Procedure Act as well as the Commodity Exchange Act.

In December 2012, the Court rejected the Institute and Chamber’s challenge and upheld the CFTC’s amendments to Rule 4.5. In response, ICI and the Chamber filed an appeal with the U.S. Court of Appeals for the District of Columbia Circuit.

This page has background information about this important case. ICI will keep this page updated as events unfold.