Are Commodity Exchange Act Registered Entities Exempt from the Corporate Transparency Act?
There are 23 separate exemptions from the CTA's beneficial ownership reporting requirement. The exemptions are listed in order in FinCEN's Final Rule at 31 CFR 1010.380 and take effect on January 1, 2024.
CTA Exemptions Generally
In general, the CTA exempts companies that already report their beneficial ownership to the U.S. government under a separate legal framework. FinCEN's Final Rule addresses each exemption separately in subsection 1010.380(c)(2).
Exemption Number 14 - Commodity Exchange Act registered entity
Subsection 1010.380(c)(2)(xiv) of the Final Rule exempts:
(xiv) Commodity Exchange Act registered entity. Any entity that:
(A) Is a registered entity as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a); or
(B) Is:
(1) A futures commission merchant, introducing broker, swap dealer, major swap participant, commodity pool operator, or commodity trading advisor, each as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a), or a retail foreign exchange dealer as described in section 2(c)(2)(B) of the Commodity Exchange Act (7 U.S.C. 2(c)(2)(B); and
(2) Registered with the Commodity Futures Trading Commission under the Commodity Exchange Act.
Commodity Exchange Act
Congress passed the Commodity Exchange Act in 1936 in reaction to the Great Depression and perceived abuses involved in trading in commodity futures.
Under that law, the Commodity Futures Trading Commission regulates trading in commodity futures and derivative securities.
Registered Entity Under the Commodity Exchange Act
The term "registered entity" is defined in Section 1a(40) of the Commodity Exchange Act as:
(A)a board of trade designated as a contract market under section 7 of this title;
(B)a derivatives clearing organization registered under section 7a-1 of this title;
(C)a board of trade designated as a contract market under section 7b-1 of this title;
(D)a swap execution facility registered under section 7b-3 of this title;
(E)a swap data repository registered under section 24a of this title; and
(F)with respect to a contract that the Commission determines is a significant price discovery contract, any electronic trading facility on which the contract is executed or traded.
Each of these categories describes a separate class of entity regulated under the Commodity Exchange Act.
Other Entities Registered Under the Commodity Exchange Act
The second prong of the exemption in Section 1010.380(c)(2)(xiv) of the Final Rule includes other entities that are also registered under the Commodity Exchange Act including:
A futures commission merchant, introducing broker, swap dealer, major swap participant, commodity pool operator, or commodity trading advisor, each as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a), or a retail foreign exchange dealer as described in section 2(c)(2)(B) of the Commodity Exchange Act (7 U.S.C. 2(c)(2)(B)
Each of these terms is defined in Section 1a of the Commodity Exchange Act. Reporting companies that may be entitled to this exemption in the Final Rule should consult with regulatory counsel familiar with the Commodity Exchange Act.