# kaal:claim:1428387-020

**Claim.** The Commodity Exchange Act family and friends exemption allows a qualifying manager to trade options and futures for fifteen individuals who need not be sophisticated or qualified investors, which circumvents accredited investor standards and admits retail investors into hedge funds.

**Type.** mechanism  **Support.** argued

**Holds when.**

- where the fund manager qualifies for the families and friends CTA registration exemption

**Source quote.**

> "families and friends" program, he or she will be able to trade options and futures for 15 individuals who will not have to qualify as sophisticated or qualified investors. This helps to circumvent accredited investor standards and allow retail investors into hedge funds.

**From.** Kaal, *Hedge Fund Valuation Retailization, Regulation, and Investor Suitability* (2009), IV.B.2 CFTC Rules, page 37

**Cite as.** Kaal, Hedge Fund Valuation Retailization, Regulation, and Investor Suitability (2009). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1428387

**Verify.** sha256 of source PDF `6aa3a280dc6750723be2389f3af2aabf3a16c4ce20e49fcdaddd7f2ea95a67aa` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202009%20-%20Hedge%20Fund%20Valuation%20Retailization%2C%20Regulation%2C%20and%20Investor%20Suitability.pdf

**Failure mode.** exemption-circumvention  (family: regulatory-arbitrage)

**Topics.** defi

**Keywords.** cftc, commodity-exchange-act, accredited-investor, retailization

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.