Commodity pool operator

A Commodity pool operator (CPO) is an individual or organization that solicits or receives funds to use in the operation of a commodity pool, syndicate, investment trust, or other similar fund, specifically for trading in commodity interests. Such interests include commodity futures, swaps, options and/or leverage transactions. A commodity pool may refer to funds that trade in commodities and can include hedge funds. A CPO may make trading decisions for a fund or the fund can be managed by one or more independent commodity trading advisors. The definition of CPO may apply to investment advisors for hedge funds and private funds including mutual funds and exchange-traded funds in certain cases. CPOs are generally regulated by the United States federal government through the Commodity Futures Trading Commission and National Futures Association.

In the United States, trading of futures contracts for agricultural commodities dates back to at least the 1850s. In the 1920s, the federal government proposed the first regulation aimed at futures trading and, in 1922, the Grain Futures Act was passed. Following amendments in 1936, this law was replaced by the Commodity Exchange Act. However, it was not until 1974, when the Commodity Futures Trading Commission (CFTC) was established under the Commodity Futures Trading Commission Act, that the "commodity pool operator" was recognized in legislation. At that time the majority of trading was in futures contracts for agricultural commodities, but, as noted by the CFTC, in later years "the futures industry has become increasingly varied and complex".

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