Single Family Offices Exception Commodities

Single Family Offices Exception Commodities

by Richard C. Wilson & Family Offices Group Association Team

Single family offices avoided what could have been burdensome and potentially costly regulation, courtesy of the Commodities Futures Trading Commission.  Family offices were living under a veil of uncertainty for the last year after the CFTC issued a no-action letter in response to legislation concerning whether single family offices would have to register as commodity pool operators–and be subject to the accompanying oversight and regulation–or whether they could file for exemption.  

Now, the CFTC has decided that single family offices are indeed exempt from registration and thus need only file for the exemption by December 31 in order to claim the CPO exemption.  For family offices looking to learn more about this critical rule change, please see the following overview courtesy of Handler Thayer LLC (to read more insights from Thomas Handler of Handler Thayer LLC, pick up my latest book, The Family Office Book: Investing Capital for the Ultra-Wealthy.  

On November 29, 2012, the Commodity Futures Trading Commission (the “CFTC”) released a blanket No-Action Letter providing relief from registration as a Commodity Pool Operator (“CPO”) to family offices that qualify for the Family Office Exemption created under the DoddFrank Act, modifying the Investment Advisers Act of 1940 (the “IAA”). This relief stems from  the recent CFTC decision to rescind the CPO exemption in the Commodities Exchange Act that most family offices currently rely on to avoid registration. Without the exemption, family offices investing in mutual funds or hedge funds owning commodities could be required to
register as a CPO by December 31, 2012.

While the CFTC noted that family offices are “not operations of the type and nature that warrant regulatory oversight by the CFTC,” the new “family office exemption” is not a self-executing exemption. In order to obtain the relief set forth by the CFTC in the No-Action Letter, a family office is required to:

1. Retain the Family Office Exemption pursuant to the IAA;

2. Submit a claim for relief to the CFTC’s Division of Swap Dealer and Intermediary Oversight by December 31, 2012, containing the name, address, and phone number of the family office, and the capacity and the name of the pools of commodities owned by the family office (if applicable); and,

3. Prior to March 31, 2013, confirm its status as a family office and warrant that the family office will notify the CFTC if it no longer meets the definition of a family office pursuant to the IAA.  PDF

If you have any questions regarding this No-Action Letter or the family office exemption discussed herein, please contact Handler Thayer, LLP at (312) 641-2100.

Tags: Thomas Handler, CFTC, commodities, commodities exception, family offices exception, family office exception, family office exception, family office CFTC, family office Commodities Futures Trading Commission, Single Family Offices


Leave Your Response

* Name, Email, Comment are Required

We run the Family Offices Group, the #1 largest family office association with 84,000+ global members. We offer live events, a bestselling book, Webinars, a family office database, and a family office training & certificate program called the Qualified Family Office Professional (QFOP). To get to know us please watch this 2 minute video, and contact us any time during pacific business hours by calling (212) 729-5067 or emailing us at

Free Family Office Report (PDF)

Contact Details for 1,000 Family Offices in Excel