The derivatives regulator proposes doubling the small pool exemption to $800,000, and prints the inflation figure that would have got it to $735,097

The paragraph was removed in 2012. Regulation 4.13(a)(4), the exemption that let an operator skip commodity pool operator registration when every participant was sophisticated enough not to need the protection, was taken out and the space reserved. On Thursday the Commodity Futures Trading Commission proposed putting something back in it.

The proposal was issued on 18 August, filed for public inspection at 8.45 on Thursday morning, and publishes on Friday. It does three things, and the third is the one with the arithmetic in it.

The small pool line, and the calculator

Regulation 4.13(a)(2) exempts a person from registering as a pool operator if the pool has no more than 15 participants and total gross capital contributions across every pool that person runs stay under $400,000. Contributions from the operator, the adviser, their principals and certain named relatives do not count toward it.

That $400,000 has not moved since 2003, when the Commission doubled the $200,000 figure set in 1981. It now proposes to double it again, to $800,000, and says the doubling reflects the approximate cumulative inflationary impact since 2003.

Then it prints its own working. Using the CPI Inflation Calculator, the release says, $400,000 in January 2003 has the same buying power as $735,097 as of July 2026. The proposed number is $64,903 above that. Nothing in the document reconciles the two figures, and the fifteen participant limit stays exactly where it is, so the only thing on the move is the money.

The exemption being restored

The larger part of the proposal is a new exemption from pool operator registration for investment advisers already registered with the Securities and Exchange Commission, where the pool's participants are limited to sophisticated investors and other conditions are met, with a matching exemption on the commodity trading adviser side. The document is explicit that this is a restoration rather than an invention: a conforming amendment would reinstate the cross reference to paragraph (a)(4) that was deleted in 2012, so that the National Futures Association's electronic filing system can record claims under what the release calls the restored exemption.

The sophistication test is the qualified eligible person definition, which is not a modest one. Its portfolio requirement asks for securities and other investments worth at least $4m, or at least $400,000 posted with a futures commission merchant as initial margin and option premiums, or a combination of the two adding to 100 percent.

The Commission also says the proposal, if adopted, would supersede certain no-action positions its Market Participants Division has issued, which the document identifies as Letter 25-50. Advisers currently sitting on staff relief would be moved onto a rule.

The vote

The voting summary at the end of the release is two sentences. Chairman Selig voted in the affirmative. No Commissioner voted in the negative.

Comments are due 45 days after publication.