Legal Risk Management Tip for the Month – Commodity Investments for Advisors and Investment Companies

Jacko Law Group, PC (JLG) is very proud to present our new Legal Risk Management Tip for the month of March, authored by JLG’s recent addition to the legal team, Charles H. Field, Esq. Mr. Field has over 26 years of experience working with business leaders and senior executives on matters affecting investment advisors (IAs), broker-dealers (BDs) and private funds. His extensive knowledge of this field lends itself to our March Legal Tip, where Mr. Field details the intricacies, definitions, exemptions and impacts of commodity investments.

Commodity interests, Mr. Field explains, have “not always been straight forward.” The Commodity Exchange Act (CEA) first defined a commodity as “any item included on an enumerated list” of a wide variety of “goods,” according to Field. But once the CEA was transferred to The Commodities Futures Trading Commission (CFTC), the definition of a commodity changed. These changing definitions to commodities and their associated financial terminology – particularly “commodity pool operators” (CPOs) and “commodity trading advisors” (CTAs) – were further complicated by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), which expanded and revised these definitions, in the words of Field, “with the overall effect of capturing ‘trading’ in security futures products and swaps.” In this Legal Tip article, Field updates terms like “commodity pool,” “commodity pool operator” and “commodity trading advisor” with current definitions, and details the registration requirements and the exemptions that apply to CPOs and CTAs, including Rule 4.13 (a)(3), Rule 4.5, Rule 4.14 and Rule 4.7.

JLG’s Legal Risk Management Tips are concise, original articles written by our professional legal staff and posted at the end of each month. They serve as timely, in-depth analyses on the regulations, rules and provisions that impact the legal concerns of businesses. Stay up-to-date each month on the latest in legal and financial news affecting the securities industry with our Newsroom at

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