There in lies the rub as some existing commodity pool operators feel they are being placed at a competitive disadvantage to the new products. Bruce Cleland, vice chairman and former president and CEO of Campbell and Company says, "It should be a level playing field."
The CFTC, in February, published a rule proposal that could stop these RIC products in their tracks by eliminating the 2003 exemption.
While the NFA appears sympathetic to industry concerns over competition, Sexton says, "Our thrust is to ensure that there is adequate customer protection in place with regard to these products."
Sexton says the main issues are the treatment of past performance, customer reporting and disclosure document acknowledgement.Harmonizing the rules will require changes from both the CFTC and Securities and Exchange Commission (SEC).
"We are going to comment on the CFTC proposed rule and we are going to encourage the CFTC to provide relief in certain areas along with the SEC. If the SEC does not provide relief, it would be very difficult for these registered investment companies to still operate," Sexton says.
"The two regulatory agencies are trying to find a way to harmonize the rules," says Sundt, "If it is truly about investor protection, we can find a solution for that."