CFTC Eyes High Managed Futures Fees

Dec 20 2013 | 11:37am ET

The Commodity Futures Trading Commission has launched a probe into fees charged by managed futures funds.

Outgoing commissioner Bart Chilton said the agency was moved to act after Bloomberg Markets reported last month that of $11.51 billion in profits generated by 63 managed futures funds, 89% was eaten up by expenses and fees.

"Of all a regulator's duties, first amongst those should be safeguarding consumers," Chilton said. "That includes highlighting, and possibly banning, excessive fees that can gobble up profits."

"The problem is I don't think investors understand this," Chilton told Bloomberg News. "We need to do something about that."

Managed futures fees are also getting scrutiny from Capitol Hill, where the U.S. Senate Special Committee on Aging has urged the SEC and CFTC to work together on creating new fee disclosure requirements for retirement accounts run by managed-futures funds.

For his part, Chilton, who was set to leave the CFTC by the end of the year, said he would stay at the regulator beyond Dec. 31, both to assist with the agency's transition—Chairman Gary Gensler will depart at the end of the year, and his successor, Treasury Department official Timothy Massad, has not yet been confirmed. He also said the managed-futures probe won't depend on his presence.

"The inquiry won't end when I leave," he said.

President Barack Obama yesterday nominated Sharon Bowen to succeed Chilton. Bowen is a securities lawyer at Latham & Watkins.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...