CFTC Staff Letters Archive

CFTC Staff Letters Archive provides Letters from 2007 and earlier. For Letters published 2008 or later visit the All Letters page.

There are no Advisory Letters or Other Written Communications for 2007 or earlier.

Date	PDF and Description
07/30/2001	01-76 ; Rule 3.32;; No-Action The Division of Trading and Markets issued a letter to a commodity trading advisor (CTA) granting no-action relief from the requirements of Rule 3.32. Subject to the terms set forth therein, the Division stated that it will not recommend that the Commission commence any enforcement action against the CTA for failing to list certain natural persons as principals in connection with a reorganization and merger involving the CTA and another wholly-owned subsidiary of the parent corporation. The manager-managed CTA will list as principals each member of the governing manager in lieu of listing as principals each natural person principal of the parent corporation.
07/30/2001	01-75 ; Sections 5 and 5a of the Act;; No-Action The Division of Trading and Markets issued a letter granting no-action relief to permit the SFE Corporation Limited to make its electronic trading and order matching system, known as SYCOM?, available to non-Exchange Participants without obtaining contract market designation or registering as derivatives execution transaction facility pursuant to Sections 5 and 5a of the CEA.
07/30/2001	01-74 ; Section 5 and 5s of the Act;; No-Action The Division of Trading and Markets issued a letter granting no-action relief to permit the Hong Kong Futures Exchange Ltd. to make its electronic trading and order matching system, known as HKATS, available to non-Exchange Participants without obtaining contract market designation or registering as a derivatives execution transaction facility pursuant to Sections 5 and 5a of CEA.
07/17/2001	01-72 ; Rule 4.22(d);; No-Action The CPO of a pool, which commenced trading October 2000, requested exemption from them requirement of Rule 4.22(d) that the pool's 2000 Annual Report be audited. The participants supported the request. That exemption was granted upon condition that the audited 2001 report will include the 2000 data.
07/17/2001	01-71 ; Rule 4.22(f)(1);; No-Action A registered CPO requested, under Rule 4.22(f)(1), an additional extension of time to file its audited report. The CPO did not have the audited reports of investee pools. The CPO submitted statements from the investee pools and the pool's accountant. Based on supporting documentation, the request for relief was granted for the CPO until August 15, 2001.
07/11/2001	02-22 ; Sections 4d, 4f, 4g, 4k and 4p of the Act and Parts 1, 3 and 180;; No-Action The Division of Trading and Markets took a no-action position with respect to certain securities broker-dealers and registered representatives who register with the Commission as limited-purpose FCMs and APs for the sole purpose of trading certain proprietary electronically-traded broad-based-index futures contracts (the "Contracts") on a specified contract market. Under the no-action position, such limited-purpose FCMs and APs would be deemed to have complied with Commission-mandated registration, sales practice, minimum financial, treatment of customer funds, reporting, and books and records requirements by virtue of their limited-purpose registration with the Commission and their compliance with corresponding securities law regulatory and self-regulatory-organization requirements (to which they are already subject as securities broker-dealers or registered representatives). The limited-purpose FCMs and APs would remain subject to statutory disqualification proceedings, would be required to inform customers that they may still bring reparations proceedings, and would remain subject to daily computation and record requirements of Rule 1.32 concerning segregation of customer funds. In addition, with respect to books and records, they would be required to identify Contract positions in their books and records, to observe the Commission's five-year record retention requirement, to maintain in hard-copy all originally handwritten trade information documents and written orders, and to make Contract-related books and records open to inspection and copying by Commission or Justice Department representatives.
07/06/2001	01-70 ; ?5g of the CEA, 7 U.S.C. 7b-2, as amended by CFMA of 2000, New Part 160 of CFTC Regulations, 17 CFR 160, published as final rules at 66 Fed. Reg. 21,236;; No-Action An earlier interpretative letter (No. 01-48, posted on www.cftc.gov) answered the first inquiry in the MFA letter, and stated that the CFTC privacy rules, to be published at 17 CFR Part 160, apply to operators of hedge funds that are registered with the CFTC as Commodity Pool Operators (CPOs). This letter answers the second inquiry, and states that institutional investors are not "consumers" within the definition of the CFTC privacy rules, and are, therefore, not entitled to the notice, the information disclosure provisions, or the opt-out opportunity provided by these rules.
07/02/2001	01-69 ; Rules 4.7(a)(1)(v); 4.7(a)(2)(ix) and 4.7(a)(3)(ix);; No-Action The Division of Trading and Markets issued an interpretation that the assets of a revocable grantor trust (Trust) may be considered in determining whether the grantor and thus the Trust are qualified eligible persons (QEPs) within the meaning of amended Rule 4.7. The Trust was not formed for the specific purpose of either participating in an exempt pool or opening an exempt account, and the grantor of the Trust was the sole source of funding and was solely responsible for making investment decisions for the Trust. The Division's interpretation is intended to coordinate the QEP definition with the accredited investor definition under Rule 501(a)(5) of Regulation D under the Securities Act of 1933.
06/28/2001	01-68 ; Rule 4.22(f)(1);; No-Action A registered CPO requested, under Rule 4.22(f)(1), an extension of time to file its audited report. The audited reports of investee pools would not be available until late June 2001. The CPO submitted a statement from the pool's accountant and provided information regarding the missing investee pools. Based on supporting documentation, the request for relief was granted for the CPO until July 9, 2001.
06/21/2001	01-73 ; Section 4m(1);; No-Action The Division of Trading and Markets granted CPO and CTA registration "no-action" relief to two state-regulated insurance companies (parent and wholly-owned subsidiary) in connection with the offer and sale of life insurance and annuity products to QEPs. The premiums paid for the products would be invested through insurance company separate accounts in one or more investment fund(s) managed by a registered CPO, which would in turn invest in other investment funds, one or more of which may be commodity pools operated by registered CPOs. The products would be marketed by SEC-registered broker-dealers. The Division considered significant the following: (1) that a registered CPO and CTA would select any commodity pools into which premiums would be invested; (2) the insurance companies are subject to state regulation and the placement agents for the products would be SEC-registered broker-dealers; (3) the insurance companies would design insurance features and would not participate in managing commodities-related investments; (4) premiums would not be used for direct commodity interest trading, but only to purchase interests in limited liability trading vehicles, some of which would trade commodity interests; and (5) only QEPs would be allowed to purchase the products. The no-action position was expressly conditioned upon restriction of commodity interest trading exposure to pools operated by registered CPOs who will perform the same functions as the CPO identified in the request letter.