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Affiliate of a Futures Commission Merchant, Commodity Trading Advisor, Commodity Pool Operator or Introducing Broker
Understanding the Role of an Affiliate of a Futures Commission Merchant, Commodity Trading Advisor, Commodity Pool Operator or Introducing Broker
Definition & Meaning
An affiliate of a futures commission merchant, commodity trading advisor, commodity pool operator, or introducing broker is a company that has a controlling relationship with one of these entities. This means the affiliate can either control, be controlled by, or share common control with the futures commission merchant or similar entity. Additionally, a company may also be considered an affiliate if it is regulated under Title V of the Gramm-Leach-Bliley Act (GLB Act) by the Federal Trade Commission or another federal regulator, and if the relevant rules treat the futures commission merchant or similar entity as an affiliate.
Table of content
Legal Use & context
This term is primarily used in the context of financial regulation and compliance. It is relevant in areas such as commodity trading, investment management, and financial services. Understanding affiliate relationships is crucial for compliance with regulations set forth by the Commodity Futures Trading Commission (CFTC) and the Federal Trade Commission (FTC). Users may encounter forms or procedures related to these affiliations, which can be managed using legal templates provided by services like US Legal Forms.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A company that provides investment advice and is controlled by a registered commodity trading advisor may be considered an affiliate. This relationship requires compliance with specific regulations to ensure proper disclosure and consumer protection.
Example 2: A futures commission merchant that is part of a larger financial services group, which includes a commodity pool operator, would fall under the definition of an affiliate due to their common control. (hypothetical example)
Relevant laws & statutes
Key statutes include:
Gramm-Leach-Bliley Act (GLB Act) - particularly Title V, which governs the privacy and regulation of financial institutions.
Commodity Exchange Act - which regulates commodity futures and options markets.
State-by-state differences
State
Differences
California
Has specific state regulations for commodity trading that may affect affiliate definitions.
New York
Regulations may differ in terms of disclosure requirements for affiliates in financial services.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Futures Commission Merchant
A person or organization that solicits or accepts orders for futures contracts.
Commodity Trading Advisor
A professional who provides advice on trading commodities or futures.
Commodity Pool Operator
A person or organization that operates a commodity pool, which is a collective investment vehicle.
Common misunderstandings
What to do if this term applies to you
If you believe you are involved with an affiliate of a futures commission merchant or similar entity, it is important to understand your rights and obligations. You may want to:
Review any agreements or contracts related to your involvement.
Consult with a legal professional to ensure compliance with relevant regulations.
Explore US Legal Forms for templates that can assist you in managing your legal needs.
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