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
03/18/1997	97-34 ; Part 34 - Regulation of Hybrid Instruments;; No-Action The CFTC's Off-Exchange Task Force has issued a no-action letter recommending that the Commission not take enforcement action against certain individuals for engaging in the offer and sale of certain trust securities that are linked to the prices of individual equities. The Task Force has determined that such securities are not inconsistent with the Commission's statutory interpretation on Hybrid Instruments.
03/18/1997	97-33 ; Part 34 - Regulation of Hybrid Instruments;; No-Action The CFTC's Off-Exchange Task Force has issued a no-action letter recommending that the Commission not take enforcement action against certain individuals for engaging in the offer and sale of certain trust securities that are linked to the prices of individual equities. The Task Force has determined that such securities are not inconsistent with the Commission's statutory interpretation on Hybrid Instruments.
03/11/1997	97-11 ; Section 4m(1);; No-Action The Division of Trading and Markets would not recommend that the Commission take any enforcement action against a commodity pool operator (CPO) based upon the CPO's failure to register as a CPO in connection with its position as a co-general partner of a partnership. The relief was conditioned upon the CPO not exercising discretion, supervision or control over, or taking part in (a) the solicitation, acceptance or receipt of funds or property to be used for purchasing interests in the partnership, or (b) the investment, use or other disposition of funds or property of the partnership, and receipt by the Division of a copy of the joint and several liability acknowledgments executed by the co-general partners.
03/07/1997	97-12 ; Section 4m(1) and Rule 4.7(a);; No-Action The Division of Trading and Markets would not recommend that the Commission take any enforcement action against a commodity pool operator (CPO) based upon the CPO's failure to register as a CPO in connection with the offering of a variable annuity contract where the CPO was a mutual life insurance company subject to regulation under state insurance law, the contract was offered by a registered broker-dealer subsidiary of the CPO, the contract was offered only to a select group of investors with extensive business and finance education and experience, investment in commodity interests was limited to investment in other funds, and a registered CPO acted as Investment Manager and was delegated responsibility of the preparation and distribution of annual reports and of books and records. The Division also would not recommend that any enforcement action be brought: (1) against the registered CPO based upon the CPO's operation of a partnership as Rule 4.7(a) exempt pool notwithstanding the presence in the partnership of non-qualified eligible participant (QEP) partners; or (2) against the registered CPO and the CPO of any Rule 4.7 exempt pool in which the subaccount invested based upon the investment of more than ten percent of the subaccount's assets in Rule 4.7 exempt pools.
02/27/1997	97-23 ; Rule 4.7(a);; No-Action The Division of Trading and Markets permitted a registered CPO to continue to claim relief under Rule 4.7(a), notwithstanding the admission of a non-QEP individual into the Pool. The non-QEP had been a Managing Director of the Pool's Analytical Arbitrage Operations for over a year and a half, was previously employed as a trading strategist and, in that capacity, was responsible for developing new trading strategies for a $100 million proprietary fund, was fully familiar with the investment activities of the Pool and had access to its books and records.
02/27/1997	97-10 ; Rule 4.26(b);; No-Action The Division of Trading and Markets took a "no-action" position relieving CPOs of certain publicly offered commodity pools from the requirement in Rule 4.26(b) to deliver a copy of the pool's most recent Annual Report at the same time as the Disclosure Document is delivered to a prospective participant. The relief was conditioned upon: (l) inclusion in the monthly Account Statement delivered within the Disclosure Document of any material information required to be contained in the Annual Report; (2) disclosed availability of net asset value per unit from the CPO or broker; (3) availability of a paper copy of the most recent Annual Report upon request; (4) delivery of the most recent Annual Report within 21 days of participant's purchase of units; and (5) right to redeem at least as frequently as monthly.
02/21/1997	98-04 ; Section 4m(1); Rule 4.23(a);; No-Action The Division of Trading and Markets confirmed that "A," a registered CPO that performed certain recordkeeping and administrative functions on behalf of "B" and "C," two other registered CPOs, would not be deemed to be a CPO with respect to the pools operated by B and C (although A would still be an agent and fiduciary of "B" and "C"). Comptemporaneously, the Division exempted "B" and "C" (in connection with "A"'s performance of recordkeeping services on their behalf) from the requirements to maintain at their main business offices the books and records specified in Rules 4.23(a)(1) and (a)(2), 4.23(a)(4) through (a)(8) and 4.23(a) (10) and (a) (11), provided that, among other things: (1) duplicates of such records would be kept, respectively, at "B"'s and/or "C"'s main business office; and (2) all books and records would be available to Commission or Justice Department representatives.
02/14/1997	97-06 ; Rule 4.7 - Section 4m(1);; No-Action The Division of Trading and Markets took a "no-action" position permitting an employee investment trust formed as an investment vehicle for employees and officers (and their families) of a registered CPO and its affiliates to be treated as a QEP/QEC (notwithstanding that not all of its participants are QEPs) in the context of the investment trust's participation in Rule 4.7 pools operated by the CPO and advised by the CPO and its affiliates. The Division also took a "no-action" position such that the trustees of the investment trust need not register as CPOs.
02/12/1997	97-05 ; Rule 4.14(a)(8), Section 4m(1);; No-Action The Division of Trading and Markets permitted a registered investment adviser to rely on an exemption from CTA registration provided by Rule 4.14(a)(8), despite the fact that the entity for which advice was being provided, an offshore fund having no U.S. investors, was not a qualify entity under Rule 4.5. The adviser provided commodity trading advice which was "solely incidental" to its business of providing securities advice, agreed to employ only those strategies which were consistent with the eligibility status under Rule 4.5(c)(2), and did not otherwise hold itself out as a CTA.
02/06/1997	97-09 ; Rule 4.31;; No-Action The Division of Trading and Markets granted an exemption to a commodity trading advisor (CTA) from the requirement that the CTA prepare and deliver a Disclosure Document pursuant to Rule 4.31. The CTA was selected to be the investment advisor for a foreign fund which accepted investments only from non-United States persons. In an issue of first impression, although some of the CTA's clients were United States persons, they were all qualified eligible clients for whom the CTA claimed relief from Rule 4.31. The Division exempted the CTA from compliance with Rule 4.31 solely with respect to its contemplated services on behalf of the fund.