ICI Responds to CFTC’s Adoption of Harmonization Rules

By Ianthe Zabel

August 14, 2013

ICI issued the following statement about the Commodity Futures Trading Commission’s (CFTC) adoption of harmonization rules related to Rule 4.5, which governs registration of commodity pool operators:

Since the CFTC first proposed amending its Rule 4.5 in February 2011, we have urged that the agency minimize duplicative burdens and unnecessary costs on funds and their investors. With this perspective in mind, we are currently reviewing the CFTC’s latest release in detail.

Learn more about ICI’s stance on Rule 4.5 at ICI’s Commodity Investments Resource Center.

TOPICS: Commodity Investments

ICI Research Shows That Commodity Mutual Funds Are Not Driving Commodity Markets

By Paul Schott Stevens

May 9, 2012

Investors benefit greatly from funds that provide investors exposure to a broad basket of commodities—from energy to precious metals to agricultural products. These investments offer valuable portfolio diversification, because commodities prices historically have not been strongly correlated with stock or bond returns. And as raw materials for the goods that businesses and consumers buy, commodities offer investors an opportunity to protect themselves from inflation.

Read more…

TOPICS: Commodity Investments

Commodity Price Trends: It’s Fundamentals, Not Funds

By Chris Plantier

April 17, 2012

As gasoline prices approach a national average of $4 per gallon, the role that financial investment flows into commodities markets play is once again in focus. In a forthcoming paper, I examine the relative importance of economic fundamentals and financial investment flows in explaining broad commodity price movements.

All Funds and Investors Have a Stake in Our Challenge to CFTC

By Paul Schott Stevens

April 17, 2012

ICI and the U.S. Chamber of Commerce have joined together in a legal challenge to a rule by the Commodity Futures Trading Commission (CFTC). We are asking the U.S. District Court for the District of Columbia to vacate and set aside the CFTC’s recent amendments to its Rule 4.5.

CFTC Decision Imposes Inconsistent Requirements on Funds, Hurts Shareholders

By: Karrie McMillan

March 5, 2012

The Commodity Futures Trading Commission (CFTC) recently finalized a rule—known as Rule 4.5—that will require many advisers to mutual funds that invest in commodity futures, commodity options, and swaps to register with the agency. This development is deeply troubling for at least two reasons:

It will impose duplicative and fundamentally inconsistent requirements on these funds.
Shareholders will pay the ultimate price for this rule in the way of increased fees and fewer investment options.

Amended CFTC Rule 4.5 Appears to Impose Unnecessary Burdens on Many Mutual Fund Advisers

By: Rachel McTague

February 10, 2012

On February 8, the Commodity Futures Trading Commission (CFTC) issued amended Rule 4.5, a regulation governing commodity pool operators (CPOs), as well as a related rule proposal. Among other changes, the amendments to the rule significantly narrow the ability of registered investment advisers to rely on the rule’s exclusion from regulation as a CPO. As a result, many advisers will be required to register with the CFTC even though they are already regulated by the Securities and Exchange Commission (SEC).

Fund Investment in Commodities Provides Opportunity and Diversification for Investors

By Karen Lau Gibian and Rachel H. Graham

January 26, 2012

On Capitol Hill, a hearing at the Permanent Subcommittee on Investigations (PSI) raises questions about mutual fund investors’ ability to get commodity exposure in their portfolios and suggests the Internal Revenue Service (IRS) should no longer allow this type of investment.

ICI Responds to Hearing on Excessive Speculation

By Stephanie Ortbals-Tibbs

November 3, 2011

ICI issued the following statement in response to today’s hearing, “Excessive Speculation and Compliance with the Dodd-Frank Act,” before the Senate’s Permanent Subcommittee on Investigations.

The Uphill Path to Better Economic Analysis in Rulemaking

By Paul Schott Stevens

August 10, 2011

Last month, the United States Court of Appeals for the District of Columbia Circuit vacated the Securities and Exchange Commission’s rule on proxy access. The unanimous ruling marked the fifth time since 2005 that the DC Circuit has struck down an SEC rule, and the third decision based on the agency’s failure to properly weigh economic consequences and to consider—as the law requires—the effects of its rules on efficiency, competition, and capital formation.

Wall Street Journal Falls Short with Story on Funds’ Commodity Investments

By Ianthe Zabel

April 26, 2011

Today’s Wall Street Journal included an article that attempted to analyze the debate over regulation of commodity investments through mutual funds. Unfortunately, the story omitted basic facts about mutual fund regulation and oversight, and thus fell short of providing an accurate explanation of the issue and debate.

CFTC Proposal Would Subject Funds to Duplicative, Conflicting Regulatory Requirements

By Sarah Bessin and Rachel Graham

April 15, 2011

Funds use swaps and other derivatives in a variety of ways to manage their investment portfolios, and many of these uses are unrelated to speculation. This is why we have been particularly concerned by a proposal from the Commodity Futures Trading Commission (CFTC) to revise Rule 4.5, which provides an exclusion for funds and certain “otherwise regulated” entities from regulation as commodity pool operators (CPOs).

ICI Letter Details Benefits of Having Diversified Funds Investing in the Futures and Swaps Markets

By Heather L. Traeger

January 12, 2011

We’ve just filed a letter to the Commodity Futures Trading Commission (CFTC) on the use of position limits for derivatives. Our letter urges the CFTC to establish an exemption from position limits for funds that comply with the diversification and leverage requirements of the Investment Company Act of 1940.

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