A Commodity Pool is a form of investment fund that offers securities for sale which track the underlying performance of a commodity such as futures contracts or foreign exchange contracts. The Commodity Pool Operator is a Commodity Pool promoter who either markets interests in a Commodity Pool or makes trading decisions on behalf of the fund. Commodity Pool Operators are required to register with the National Futures Association – owners of the Commodity Pool having to register as Principals while salespersons having to register as Associated Persons. Commodity Pool Operator registration can be a complex and sometimes arduous process.
Commodity Pool Operator registration is on the rise. In recent years, as traditional debt and equity markets have offered substandard returns, investors have flocked to the futures and forex markets. With that paradigm shift has come a great influx of capital into Commodity Pools as investors seek broader portfolio diversification. Sophisticated Commodity Pool Operators that are able to promote compelling investment propositions in the commodities markets stand to attract considerable amounts of capital and establish lucrative asset management businesses.