Increased commodity regulation is forcing ETF issuers to find loopholes to keep their strategies alive. The latest funds to reconfigure are

Deutsche Bank's

(DB) - Get Deutsche Bank AG Report

PowerShares DB Agriculture

(DBA) - Get Invesco DB Agriculture Fund Report

and

PowerShares DB Commodity

(DBC) - Get Invesco DB Commodity Index Tracking Fund Report

ETFs.

Rather than shutting down DBA, in the same fashion in which it shuttered giant PowerShares DB Crude Oil Double Long

ETN

in September, PowerShares will join the list of ETF issuers that are finding creative ways around commodities restrictions.

In order to satisfy the new

"safety position limits"

set by the Commodity Futures Trading Commission, $3.3 billion DBC and $2.2 billion DBA will reduce positions in corn and wheat futures by the end of October. In addition to enforcing the new limits, the CFTC has revoked an exemption that previously allowed DB ETF products to exceed position limits on agricultural products.

Like other popular commodities ETFs, including

United States Oil

(USO) - Get United States Oil Fund LP Report

and

United States Natural Gas

TheStreet Recommends

(UNG) - Get United States Natural Gas Fund LP Report

, DBA and DBC invest in commodities futures in order to achieve their tracking strategies. The bigger the ETFs grow, the more futures ETF managers buy.

CFTC hearings in recent months have made it increasingly clear that increased position limits would be placed on futures-based commodity ETFs. In response to looming regulatory changes, ETF managers have variously halted creation of new shares,

shut down funds

and

restructured their underlying investment strategies

.

The latest move by PowerShares will be a restructuring. DB has announced that in addition to reducing its holdings in corn, wheat, crude oil and sugar, it would be adding coffee, cocoa, live cattle, copper, natural gas and gasoline. Adding new commodities to the fund will reallocate assets and allow the fund to continue to function within position limits.

In addition to asset reallocation, DBC will also begin investing in Brent crude, an oilfutures contract traded in Europe. This loophole will allow the fund to reduce its U.S.-regulated oil holdings to 12.4% from 35% while adding Brent crude, gasoline and natural which will account for 12.4%, 12.4% and 5.5%, respectively.

As regulations hit futures traded on the New York Mercantile Exchange, fund issuers like PowerShares and United States Commodity Funds will simply reallocate assets to arenas that have different regulations. DBC's decision to cut down on Nymex-listed oil and buy Brent crude is a excellent example of this transition.

The threat of similar restrictions also

has caused the mangers of UNG

to cut back on natural gas futures contracts listed in the Nymex in favor of swaps that trade elsewhere.

Where there is a will, there is a way, and commodity ETF providers will continue to find ways to keep their funds running, even if it means riskier options for investors. Uncertainty is perhaps the greatest risk that futures-based commodity ETF investors face. Avoid these funds until the

regulatory showdown

has reached a resolution.

Don Dion is president and founder of

Dion Money Management

, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.

Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.