CFTC No-Action Letter 25-50: Recasting the QEP Exemption

On December 19, 2025, the staff of the CFTC’s Market Participants Division (“MPD”) issued CFTC No-Action Letter 25-50 that grants no-action relief (the “No-Action Relief”) from registration as a commodity pool operator (“CPO”) and commodity trading advisor (“CTA”) for eligible investment managers¹ with respect to qualifying private funds where the following conditions are satisfied:

• SEC Registration: The manager is registered with the SEC as an investment adviser (an “RIA”);
• Private Offering: The interests in the manager’s pool are exempt under the Securities Act of 1933 and are not marketed to the public in the United States;
  • Importantly, advertising in compliance with 506(c) does not bust this exemption;
• Investors are QEPs: The manager reasonably believes that each investor in the pool is a qualified eligible person (“QEP”) when
  • (i) it begins relying on the No-Action Relief; or
  • (ii) at the time of investment;
• Form PF Filing: The RIA files a Form PF with respect to the pool, which is received by the CFTC; and
• Notice Filing: The RIA files notice of its reliance on the No-Action Relief with MPD.

On its face, this provides a powerful exemption from registration. The No-Action Relief imposes no limits on trading commodity interests, unlike the popular de minimis exemption in CFTC Rule 4.13(a)(3).

While a former version of the No-Action Relief was previously found in CFTC Rule 4.13(a)(4), the No-Action Relief imposes materially different requirements than the old rule.

The No-Action Relief is different than old CFTC Rule 4.13(a)(4)

Old CFTC Rule 4.13(a)(4) was enacted in 2003 to eliminate “duplicative, overlapping, and conflicting regulatory requirements applicable to SEC-registered private fund managers.”²

In 2012, the CFTC rescinded a previous version of the No-Action Relief that was found in old CFTC Rule 4.13(a)(4) as a part of post-Dodd-Frank regulatory changes.

But related regulations have changed significantly since the 2012 rescission. For instance, compare the SEC’s adjustments to the “qualified client” thresholds against the CFTC’s adjustments to the QEP portfolio requirements:

• Qualified Client thresholds (2021 changes)
  • The assets-under-management test increased from $1,000,000 to $1,100,000
  • The net worth test increased from $2,100,000 to $2,200,000
• Qualified Eligible Person thresholds (2024 changes)
  • The securities and investments threshold doubled from $2,000,000 to $4,000,000
  • The FCM-deposit threshold doubled from $200,000 to $400,000

Notably, while the SEC recently considered adjusting the accredited investor thresholds, it has not yet taken such action.³

In other words, the investor thresholds applicable to the No-Action Relief are no longer substantively similar to the SEC investor thresholds under the custody rule. In fact, the No-Action Relief imposes a dollar threshold akin to the “qualified purchaser” threshold for natural persons (currently $5,000,000 in investments)⁴ applicable to investors in Section 3(c)(7) funds.⁵

What this means for Dual-Registered CPOs/CTAs and RIAs

Ultimately, some dual-registered RIAs of qualifying private funds may seek to mitigate ongoing compliance costs by deregistering as a CPO in reliance on the No-Action Relief.

However, despite the CFTC’s stated intent for the No-Action Relief to provide liquidity for all market participants,⁶ some dual registrants may wait for more permanent regulatory changes, like formal rulemaking from the CFTC. Notably, given the typical extended timeline for formal rulemaking, there is precedent for the CFTC to issue No-Action Relief ahead of formal rulemaking.

Interestingly, a dual-registered RIA operating a “pure” commodity pool (i.e., the fund does not trade securities) might not qualify for the No-Action Relief with respect to such pool because the RIA might not list the pool on its Form PF.⁷

Additionally, the No-Action Relief does not provide an exemption from registration as a CTA unless the CTA is also the CPO of a qualifying pool.

The No-Action Relief, which was granted the day after Michael Selig was confirmed by the U.S. Senate, suggests a tone shift at the CFTC and that the CFTC may codify the No-Action Relief through rulemaking in the future. However, until a final rule is made, the No-Action Relief is a staff no-action position which may be modified or withdrawn by the CFTC in the future.

Next Steps

Analyze the No-Action Relief.
SEC-registered investment advisers should carefully evaluate the No-Action Relief with their legal counsel to confirm applicability, as well as the desirability of relying on no-action relief alone, and ensure reliance would not inadvertently cause a violation of the Commodity Exchange Act or CFTC rules or regulations.

No mandatory redemptions.
MPD also confirmed that managers withdrawing their registration in reliance on the No-Action Relief are not required to offer investors an opportunity to withdraw from the pool.⁸ Normally, a registered CPO that withdraws from registration to claim an exemption must offer existing investors an opportunity to withdraw from the fund (CFTC Rule 4.13(e)(2)).

Update compliance and offering materials, as applicable.
Managers should also update any compliance policies, NFA questionnaires, and offering materials to reflect their reliance on the No-Action Relief.

Because the filing notice for the No-Action Relief is sent to MPD and not National Futures Association (“NFA”), it is unclear whether NFA will ultimately receive the exemption notice or reflect the filing in NFA Basic. In other words, in the context of NFA Bylaw 1101, it is currently unclear how NFA expects its members to verify a party’s reliance on the No-Action Relief. Therefore, it is paramount that a manager relying on the No-Action Relief maintain evidence of its filing and the CFTC’s acknowledgement of the same.

Summary

The No-Action Relief signals a potential shift in the CFTC’s view of its role alongside the SEC. It is consistent with the CFTC’s long-standing position that sophisticated investors do not require the same level of regulatory protection as retail investors, especially under the SEC’s parallel oversight.

Managers should watch for formal rulemaking in this area. For now, the No-Action Relief provides a path for some dual registered RIAs to reduce their compliance burden and focus on trading strategies, rather than CFTC registration requirements or trading limits under CFTC Rule 4.13(a)(3).

Footnotes

1. The manager must comply with the notice requirements in CFTC Rule 4.13(b) by properly filing notice of its reliance on the No-Action Relief with MPD via email rather than making a filing with NFA (defined below), and must comply with the record keeping requirements found in CFTC Rule 4.13(c).
2. Thomas J. Smith, CFTC No-Action Letter, CFTCLTR No.25-50 at 2, 2025 WL 3765066 (Dec. 19, 2025).
3. SEC, Review of the “Accredited Investor” Definition under the Dodd-Frank Act (Dec. 14, 2023).
4. See 15 USC § 80a-2(a)(51).
5. The threshold applicable to many entities is $25,000,000. Id.
6. Smith, supra note 2, at 2.
7. A pool that is excluded from the definition of “investment company” under the Investment Company Act of 1940 solely because it does not trade securities would not necessarily rely on Sections 3(c)(1) or 3(c)(7) (and, therefore, would not be required to be listed on the RIA’s Form PF).
8. Smith, supra note 2, at 8.