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
11/15/2000	00-105 ; Section 4d(1);; No-Action The Division of Trading and Markets issued a no-action position, for failing to register as an IB, to an online company that provides an electronic trading platform where elevators and producers can negotiate to buy and sell cash grain, and as part of the platform the company offers an integration tool permitting elevators to be linked to their chosen FCM. The Division took this position based upon the company's representations that: 1) without this tool, elevators might not be willing to undertake the risks presented by purchasing cash grain through the trading platform; 2) this tool will facilitate as reasonable business purpose, i.e., the hedging of cash purchases by elevators; 3) the company has no involvement in selecting the FCMs that any elevator uses; and 4) the company does not receive any direct compensation from such FCMs.
11/14/2000	00-102 ; 4.22(c) & (d);; No-Action The CPO of a Fund requested an exemption from the requirement of Rule 4.22(d) that the Fund's 1999 Annual Report be audited, and exemption from the requirement of Rule 4.22(c) that the Fund distribute an annual report to participants. Based on the ownership structure, the managing member and the only investor of the Fund are synonymous. The investor submitted a consent waiver statement in support of the exemption. The Fund subsequently closed in August 2000 and the CPO requested the same exemptions for 2000.
11/13/2000	00-103 ; Section 2(a);; No-Action The Office of the General Counsel (OGC) issued a no-action letter that will permit the offer and sale in the U.S. of the SPI 200 futures contract based on the Standard & Poors/Australian Stock Exchange 200 Index traded on the Sydney Futures Exchange, Limited.
11/07/2000	00-101 ; Section 4f(b) of the CEAct and Commission Regulation 1.17(c)(5)(x);; No-Action The Division of Trading and Markets took a "no-action" position with respect to futures commission merchants (FCMs) or introducing brokers (IBs) that, in computing their respective adjusted net capital, do not take full capital charges, as set forth in Regulation 1.17(c)(5)(x), on open futures positions that are part of certain inter-exchange spread transactions involving futures contracts listed on the Cantor Financial Futures Exchange (Cantor). To be eligible for the relief, the inter-exchange spread must satisfy certain conditions, including that the Cantor and non-Cantor futures contracts have substantially similar terms and conditions and are based on the same underlying financial instruments.
11/01/2000	00-100 ; Regulation 4.10(d)(1);; No-Action The Division of Trading and Markets found that a limited partnership composed of family members was not a commodity pool within the means and intent of Rule 4.10(d)(1) and, consequently, that the General Partner was not a CPO thereof.
10/17/2000	00-99 ; Section 4m(1);; No-Action The Division of Trading and Markets took a CPO registration "no-action" position with respect to one of two co-managing members of four investor pools in a master-feeder fund structure based upon, among others, representations that: (1) the unregistered co-managing member would be excluded from commodity interest trading; (2) all CPO functions would be performed by the other (CPO-registered) co-managing members; (3) the unregistered co-managing member is not subject to statutory disqualification; and (4) cross acknowledgments were made by both co-managing members of joint and several liability for each other's CEA and/or Commission rule violations. All commodity interest trading activity would take place at the investee pool (master fund) level, for which the registered co-managing member is the CPO, and the investee pools would be advised by a CTA-registered affiliate of the registered co-managing member.
10/04/2000	00-96 ; Section 4m(1) - CPO and CTA Registration;; No-Action The Division of Trading and Markets issued a CPO registration no-action position to the management company of an offshore fund, notwithstanding the fact that the management company is owned by U.S. persons, based upon, among others, representations that: 1) neither the fund nor the management company was organized offshore to avoid CPO registration requirements; 2) no U.S. person will participate in the fund; 3) no marketing activities will be conducted from the U.S.; and 4) the Fund will be operated in a manner consistent with Rule 4.5(c)(2). The Division issued a CTA registration no-action position to the U.S.-based advisor of the fund based upon, among others, the foregoing representations and additionally that: 1) the CTA is registered as an investment adviser, and 2) it will comply with Rule 4.14(a)(8) in advising the fund.
10/03/2000	00-95 ; Section 4m(1) of the CEAct and CFTC Rules 4.5 and 4.14(a)(8);; No-Action The Division of Trading and Markets issued a no-action position to an investment company incorporated outside the U.S. to permit it to operate certain commodity pools organized outside the U.S. without registering as a CPO, despite the fact that the company has several U.S. persons serving as directors. This Division took this position because, among other things: 1) no U.S. person will participate in the pools, except that a U.S. affiliate of the foreign investment company and certain management employees will have voting rights for a particular pool and the U.S. affiliate has contributed a small amount of seed capital to some of the other pools; 2) no marketing of the pools to U.S. persons or from within the U.S. has been undertaken; 3) the pools will be operated in a manner consistent with Commission Rule 4.5(c)(2); and 4) the U.S. Directors will not engage in any other activities that would require registration under the Commodity Exchange Act. The Division also provided no-action relief to the U.S. affiliates of the foreign investment company that furnish commodity interest advisory services to pools because, among other things, the affiliates are registered securities investment advisers and will provide advisory services in accordance with Commission Rule 4.14(a)(8).
09/27/2000	00-94 ; Rule 1.57(a)(1) and Rule 30.10;; No-Action The Division of Trading and Markets permitted the New York branch of a French bank to register in the U.S. as an introducing broker, to be guaranteed by a registered U.S. FCM that is subsidiary of the same bank, and to introduce business to the London branch of the same bank. The letter stated that the Division will not recommend enforcement action: (1) against the bank or its New York branch based solely upon their failure to register as FCMs in accordance with Section 4d(1) of the CEAct and Commission Rule 3.10, or (2) against the U.S. FCM or the bank for failure of the New York branch to introduce all customer accounts to the guaranteeing FCM, as required by Rule 1.57(a)(1). This letter was issued in connection with confirmation by the Commission of Rule 30.10 relief for the London branch, which permits it to solicit and accept orders and funds from U.S. customers for trades on boards of trade located outside the U.S. without registration as an FCM. The New York branch was treated essentially as an affiliate or subsidiary rather than a branch so that the Rule 30.10 relief would be available to the London branch.
09/25/2000	00-97 ; Section 4m(1);; No-Action The Division of Trading and Markets extended a previously-taken "no-action" position relieving a state-regulated insurance company and two trust companies from CPO and CTA registration requirements in connection with an estate planning device consisting of insurance contracts held in trust, the premium payments for which are invested in an insurance company separate account, a sub-account of which may invest in commodity pools. The no-action position was extended to include a second state-regulated insurance company under the same terms and conditions applicable to the insurance company involved in the original letter.