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 |
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96-73;  ; Rule 4.7(b)(2)(ii);; No-Action The Division of Trading and Markets granted relief from the books and records location requirement of rule 4.7(b)(2)(ii) to rule 4.7(b) exempt commodity trading advisor. Certain books and records prepared in connection with the commodity trading advisor's activities concerning qualified eligible clients may be maintained at the offices of a commodity pool operator that provides operational support, including daily account reconciliation with commodity brokers, for the commodity trading advisor, |
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| 96-79; ; section 4d(2) of the Act; rules 4.22(h), 4.23, 30.1, 304.;; No-Action The Division of Trading and Markets stated that a foreign entity that places orders on foreign futures markets on behalf of a United States commodity pool is required to register as an introducing broker (IB). The Division noted that the "clerical capacity" exemption from IB registration would not be applicable to the entity even though the entity does not exercise any discretion with respect to the computer-generated trading signals it uses to place orders. Additionally, the Division stated that since the commodity pool operator was domiciled in the United States, it must remain registered as a CPO even if the Pool becomes domiciled outside of the United States. Finally, the Division stated that CPOs are not required to manually sign every copy of the pool account statement and that a facsimile signature may be used provided that the CPO retains the account statement from which the facsimile is made in accordance with Commission recordkeeping1requirements |
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| 96-71; ; rule 4.10(d)(1);; No-Action The Division of Trading and Markets permitted a trust fund to claim relief from the definition of a commodity pool under rule 4.10(d) (1). The trust was exempted from the definition of a commodity pool since it was established by a corporation as a pension plan for the sole shareholder of the corporation. The only contributor to the trust has been the corporation and the sole beneficiary of the trust will be the sole shareholder of the corporation, |
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| 96-69 ; Rule 4.7(a);; No-Action The Division of Trading and Markets permitted a registered CPO to claim relief under Rule 4.7(a), notwithstanding the presence of non-QEPs in its pool, where the pool invests primarily in United States securities and the non-QEPs are sophisticated investors, three of whom are accredited investors and one of whom has a net worth of approximately $865,000. One of these non-QEPs also is the uncle of a securities trader for the pool's co-investment manager, and another is the father of the securities trader's assistant. As the pool no longer will be operated pursuant to the criteria of Rule 4.12(b), the Division based its relief upon, among other things, the CPO notifying each QEP and non-QEP that the pool may invest more than ten percent of its assets in commodity interests. |
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| 96-70 ; 4m(1);; No-Action A firm that provided, among other things, commodity trading advice by hosting seminars for the general public and providing a dial-up phone service to subscribers was advised to register as a commodity trading advisor. |
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| 96-68 ; Rule 1.46;; No-Action The Division of Trading and Markets (Division) gave "no-action" relief pursuant to which the Division permitted a registered CTA to use separate trading programs to trade multiple accounts for the same commodity pool, without requiring the FCM handling such pool's accounts to close out offsetting positions generated for the accounts of any such pool as a result of the operation of the separate trading programs. The relief was generated even through the CTA did not clearly demonstrate that it separately marketed the separate trading programs involved. The Division's "no-action" position was conditioned upon, inter alia, prior written consent of the pool's CPO and/or trading manager, as well as inclusion in the CPO's Disclosure Document of a paragraph explaining these circumstances and the potential for incurring extra costs to be borne by the pool. |
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| 98-31 ; Sections 4, 5 and 6 of the Commodity Exchange Act;; No-Action The Off-Exchange Task Force of the Commodity Futures Trading Commission has issued a no-action letter recommending that the Commission not take enforcement action against certain individuals for operating, or participating in, a physical delivery electronic natural gas trading system. Trading on the system is limited to qualified commercial participants, and transactions executed on the system impose binding physical delivery obligations on the participants. The Off-Exchange Task Force has determined that the operation of this physical delivery trading system does not require designation as a contract market, registration under the Commodity Exchange Act (Act), or compliance with the Act or Commission Regulations. |
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| 96-75 ; Rule 4.7 - QEP criteria and 10% investment limitation. section 4m(1) - CPO and CTA registration.;; No-Action The Division of Trading and Markets permitted an employee limited partnership to be treated as a QEP for the purpose of investing in a pool operated by an affiliate of the employees' employer. Trading and Markets also issued CPO and CTA registration no-action relief to the operator and advisor of the employee limited partnership. This relief was based upon, among other things, representations that participants in the employee limited partnership would be restricted to senior management officials who were "accredited investors. |
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| 96-67; ; Section 4m(1) of the Act;; No-Action the Division of Trading and Markets denied an IB's request for clarification that developers of commodity trading software (Third Party Advisors) are not required to register as CTAs. The Third Party Advisors recommended an AP of the IB to software purchasers, and the AP personally endorsed some trading systems in publication touting such systems. The Division required the AP to register as a CTA and provide customers with disclosure, including past performance history, if he intends to continue his current relationships with the Third Party Advisors. |
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| 96-63 ; 4m(1);; No-Action The Division of Trading and Markets granted relief from registration as a commodity pool operator to the US director of certain offshore funds here the director: (1) was the only US director; (2) was registered as an associated person with the Commission; (3) agreed to maintain a duplicate copy of the funds' books and records at his business office in the US |