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
07/14/1999	99-27 ; Rule 4.7 (Exemption) and Rule 1.56 (No-Action);; No-Action The Division permitted a CPO to claim relief under Rule 4.7 with respect to a commodity pool that had both QEP and non-QEP participants based upon, among others, representation that: 1) 93% of the capital of the participants in the Partnership was attributable to QEPs; and 2) the non-QEPs would not participate in investments by the Partnership in commodity interests, would not share in any profits and losses from the Partnership's commodity interest trading and would not have any Partnership assets allocable to them subject to claim by the Partnership's FCM. While not having non-QEP assets subject to claim by the FCM might implicate Rule 1.56, based upon such factors as the purpose of that rule, the nature of the arrangement and the capitalization of the parties to the arrangement, the Division took a "no-action" position under Rule. 1.56 with respect to the FCM.
07/14/1999	99-25 ; Section 2(a);; No-Action No-action letter allowing the Hong Kong Futures Exchange Limited (HKFE) futures contract based on the HKFE Taiwan Index to be offered or sold in the United States.
07/09/1999	99-28 ; Section 4d of the Act;; No-Action The Division of Trading and Markets (Division) declined to grant an FCM's no-action request regarding introducing broker (IB) registration requirements as applied to grain elevators with which the FCM wished to enter into a fee-splitting arrangement. Specifically, the FCM wanted to split the flat fee paid by a customer of the FCM's agricultural marketing service with the grain elevator that originally referred the customer to the FCM's service. The agricultural marketing service helped agricultural producers develop individualized marketing plans for those agricultural products that could be hedged using exchange-traded futures and options contracts. The Division noted that given positions set forth in previous no-action and interpretative letters, the grain elevators, in referring customers to the FCM for compensation, would be engaged in behavior that constituted indirect solicitation of customer orders and required them to register as IBs, even though the users of the market services were under no obligation to open a trading account with the FCM or use futures or options in marketing their agricultural products.
07/07/1999	99-26 ; Rule 1.35(a-1)(5) - Orders Eligible for Post-Execution Allocation.;; No-Action The Division of Trading and Markets issued a no-action position to a registered CTA to permit it to treat a commodity pool with assets of less than $5,000,000 as an eligible customer for purposes of bunched orders placed, executed, and allocated pursuant to Rule 1.35(a-1)(5). The no-action position was issued based upon representations that: 1) the CTA will employ an electronic block order allocation system, which uses an average price methodology, for the allocation of orders executed pursuant to Rule 1.35(a-1)(5) and allocated on a post-execution basis; 2) the CPO of the commodity pool also acts as the CPO of a pool which meets the assets requirement and satisfies the definition of a QEP in Rule 4.7; and 3) participants in the pool are current and former employees of the CTA or its affiliates or immediate family members of employees of the CTA.
06/03/1999	99-24 ; Division of Trading and Market's Regulation 1.17;; No-Action Denial of request for waiver from including in liabilities the aggregate settlement amount entered into with NFA in calculating adjusted net capital.
05/20/1999	00-29 ; Section 4k(1);; No-Action The Division of Trading and Markets determined that an employee of an IB fell within the clerical capacity exception to the AP registration requirement under Section 4k(1) of the CEAct because the employee's duties in connection with the solicitation and acceptance of customer orders were limited to giving price quotes and accepting customer orders for commodity interest contracts. The employee would not have any discretion over any of the IB's customer accounts, the employee would be paid on an hourly basis, and one of the IB's AP's would supervise the employee.
05/19/1999	99-23 ; Rule 4.10(d)(1)-Definition of "pool." Rule 4.13(a)(1)-Exemption from CPO registration. Rule 4.23-Location at which CPO books and records must be maintained.;; No-Action The Division of Trading and Markets denied a request that a fund that had decreased in net asset value was no longer a pool or that the CPO was eligible to claim relief from CPO registration under Rule 4.13(a). However, the Division granted an exemption from the specific requirements of Rule 4.23 to the extent of permitting the CPO to maintain its books and records (as a registered CPO) at the offices of another CPO, since all of the first CPO's activities with respect to the fund would be conducted at the second CPO's offices.
05/19/1999	99-21 ; Performance presentation requirements of Part 4 of the CEA;; No-Action A CTA's trading performance should reflect gains and losses attributable to participation in the CTA's trading program or charged for the CTA's money management service. The performance presentation must not reflect income (such as imputed interest) or expenses not directly attributable to the CTA's trading. While the CTA may present information to a client in any manner that the CTA and client agree to, the performance information presented in the disclosure document must be calculated in accordance with CFTC regulations.
04/27/1999	99-22 ; Rule 4.35(a)(7) and 4.34 (n);; No-Action the Commission denied a rule change or exemptive relief to enable this firm to consider a solely owned IRA and an account owned majoraly by a sibling as non-proprietary. Proprietary accounts are those accounts belonging to any person associated with any FCM, IB, CTA, CPO or Leverage Transaction Merchant as a partner, officer, employee, consultant or agent.
04/05/1999	99-17 ; Rule 4.35(a)(7) and 4.34(n);; No-Action The Commission denied inclusion of proprietary trading results in a composite table of customer accounts. Tables must be restated for all periods where the accounts are proprietary in nature. Proprietary accounts are those accounts belonging to any person associated with any FCM, IB, CTA, CPO or Leverage Transaction Merchant as a partner, officer, employee, consultant or agent.