MFA submitted a comment letter urging the Commodity Futures Trading Commission (CFTC) to revise its proposed changes to Regulation 4.7 and avoid imposing new mandatory disclosure requirements on sophisticated investors.
MFA explains that:
- Raising the qualified eligible person (QEP) thresholds could modernize the rule, but current investors should be grandfathered to avoid disrupting existing investments.
- The proposal should include a carve-out for certain fund manager employees who invest in their employers’ funds.
- There is no evidence that sophisticated investors lack the information needed to make informed investment decisions.
- Existing CFTC and National Futures Association (NFA) rules already provide strong investor protections and regulatory oversight.
- Applying retail-style disclosure requirements to private funds would create costly, lengthy, and potentially misleading disclosures.
- The CFTC should abandon the proposed disclosure regime and consider less burdensome alternatives that allow managers to tailor disclosures to investor needs.
- The Commission should conduct a more robust cost-benefit analysis before finalizing any changes to Regulation 4.7.
