Trading Commodities in a Fund

Can I Trade Commodities in a Hedge Fund?

Brent Gillett, a partner at the Investment Law Group, has contributed a question and answer series covering the establishment of a hedge fund and laws related to hedge funds.

Question: Can I trade commodities in the fund?

Answer: If  a  hedge  fund  trades  in  futures  contracts  or  options  thereon,  the  fund  would likely be considered a commodity pool under the Commodity Exchange Act and the  manager  of  the  fund  would  have  to  register with  the  Commodity Futures  Trading  Commission  as  a  commodity  pool  operator.  Such  manager  would  have to pass the Series 3 exam administered by the National Futures Association.

Guest author: Brent S. Gillett, partner at the Investment Law Group. To find more information about the Investment Law Group follow this link.

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Tags: fund commodities, hedge fund commodities, trading commodities, hedge fund strategy, hedge fund trading, hedge fund, questions, law

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