CFTC Charitable Organization Exemption Act of 2025

Bill Number: H.R. 6655
Origin Chamber: House
Congress: 119th Congress, Session 1
Policy Area: Finance and Financial Sector
Status: Introduced
Latest Action: 2026-01-13: Referred to the Subcommittee on Commodity Markets, Digital Assets, and Rural Development.
Last Updated: 2026-05-16T08:07:29Z

AI-Generated Summary

Purpose of the Legislation

The "CFTC Charitable Organization Exemption Act of 2025" aims to relieve certain charitable organizations from federal registration requirements under the Commodity Exchange Act when they provide commodity trading advice or operate commodity pools (groups that pool money to trade commodities like futures contracts). This exemption is intended to reduce regulatory burdens on nonprofits while maintaining oversight through other laws.

Key Provisions

Exemption for Charitable Organizations: Amends Section 4m of the Commodity Exchange Act to exempt qualified charitable organizations—as defined under the Investment Company Act of 1940—from registering as commodity trading advisors (CTAs, professionals who advise on commodity trades) or commodity pool operators (CPOs, entities managing pooled commodity investments). This applies when their activities are solely for the benefit of:
The charitable organization itself.
Related investment trusts or similar entities excluded from "investment company" definitions under federal securities law.
Trustees, directors, officers, employees, or volunteers acting within their roles.
Additional Exemptions Included: Retains existing exceptions for small advisors (those advising fewer than 15 people in the past year), SEC-registered investment advisors not primarily focused on commodities, and certain farm organizations or cash market dealers.
Disclosure Requirements: Exempted charitable organizations must provide specific disclosures about their operations, similar to those required under the Investment Company Act, to ensure transparency.
No Relief from Other Laws: The exemptions do not override obligations under securities laws enforced by the Securities and Exchange Commission (SEC), such as rules on issuing or selling securities related to commodity pools.

Significant Changes to Existing Law

Rewriting of Section 4m: Completely replaces the previous version of this section in the Commodity Exchange Act, incorporating the new charitable exemption alongside prior exceptions. Previously, charities could face registration if their investment activities involved commodities, even if incidental to their mission.
Expansion of Exceptions: Introduces a targeted carve-out for nonprofits, aligning commodity regulations more closely with securities exemptions for charities under the Investment Company Act. This is the first explicit exemption for charitable entities in commodity trading rules.

Potential Impacts

On Government Agencies: The Commodity Futures Trading Commission (CFTC) will have reduced registration and oversight responsibilities for exempted charities, potentially freeing resources for higher-risk market participants. The SEC's role in securities-related aspects remains unchanged, maintaining a dual regulatory framework.
On Citizens: Beneficiaries of charitable organizations (e.g., donors, recipients of nonprofit services) may see more efficient use of funds, as charities avoid compliance costs associated with CFTC registration. However, this could slightly reduce CFTC protections against fraud in charity-managed commodity investments.
On International Relations: No direct impacts, as the bill focuses on domestic U.S. commodity regulations without addressing foreign entities or cross-border trade.

Main Stakeholders Affected

Charitable Organizations: Primary beneficiaries, including nonprofits like foundations or trusts that invest in commodities (e.g., for endowments); they gain flexibility without registration hurdles.
CFTC and SEC: Regulators affected by shifted oversight—fewer CFTC filings but preserved SEC authority.
Individuals Involved with Charities: Trustees, volunteers, and employees who manage investments, as they are covered under the exemption when acting in official capacities.
Investors and Beneficiaries: Donors or recipients indirectly impacted through potentially lower administrative costs for charities.

Notable Legal, Constitutional, or Political Implications

Legal Implications: Strengthens alignment between commodity and securities laws by referencing Investment Company Act definitions, reducing potential conflicts in regulating nonprofit investments. Exempted entities remain subject to anti-fraud proceedings under the Commodity Exchange Act and full SEC rules, preserving investor protections without creating regulatory gaps.
Constitutional Implications: None apparent; the bill operates within Congress's authority to regulate interstate commerce and financial markets, without infringing on free speech, due process, or other rights.
Political Implications: Supports the nonprofit sector by easing federal burdens, potentially appealing to bipartisan interests in philanthropy and economic efficiency. It may spark debate on balancing deregulation for charities against broader market safeguards.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. McClain Delaney, April [D-MD-6]

Cosponsors (1)

Rep. Messmer, Mark B. [R-IN-8]

Recent Actions

2026-01-13: Referred to the Subcommittee on Commodity Markets, Digital Assets, and Rural Development.
2025-12-11: Referred to the House Committee on Agriculture.
2025-12-11: Introduced in House
2025-12-11: Introduced in House

Bill Versions

CFTC Charitable Organization Exemption Act of 2025 — issued 2025-12-11 — PDF (7 pages)