CFTC seeks more information from funds, advisors

WASHINGTON Wed Jan 26, 2011 11:27am EST

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WASHINGTON (Reuters) - The U.S. Commodity Futures Trading Commission unveiled two proposals on Wednesday that would require funds, commodity pools and commodity trading advisors file reports to regulators on their operations, part of a sweeping series of Wall Street reforms.

The proposals mirrored a plan introduced on Tuesday by the Securities and Exchange Commission, but they go further by seeking to gather more data from some players who had been exempt from filing reports with regulators.

The futures regulator's five commissioners voted unanimously to support the plans at a public meeting. After a 60-day comment period, separate votes are needed by the CFTC to finalize the rules.

CFTC Chairman Gary Gensler said the proposed rules would ensure "similar entities in the asset management arena" receive consistent oversight.

"What this importantly does is bring more transparency to the regulators," Gensler said.

Scott O'Malia, a Republican commissioner, said the new requirements would rescind certain reporting requirement exemptions for commodity pool operators (CPOs) and commodity trading advisors (CTAs).

"I continue to support the repeal of certain exclusions to registrational requirements for CPOs and CTAs so that we can close the regulatory gap that allows some registered companies to offer futures only products outside of the commission's jurisdiction, especially its anti-fraud authority," he said.

The joint SEC-CFTC rule is required by the Dodd-Frank law, and seeks to prevent risk that could ripple through the financial system, but the CFTC also sought to harmonize some of its existing reports, rules and exemptions for commodity pools and trading advisors with the new framework.

Like the SEC's plan, the CFTC would require reports from funds whose assets under management exceed $150 million, scaling up the level of reporting for those funds valued above $1 billion.

About 200 large funds would be affected by the joint rule, while the CFTC's additional requirements could affect about 260 funds with more than $1 billion under management and 920 smaller funds, CFTC officials said, noting the figures were rough estimates.

The National Futures Association, an industry-funded self-regulatory organization, already collects data from commodity pools and advisors quarterly, and will continue to collect the new information, the CFTC said.

(Additional reporting by Charles Abbott, editing by John Picinich and Dale Hudson)

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