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
04/26/1996	96-35; ; Rule 4.10(d)(1) and Section la(4) of the Act;; No-Action The Division of Trading and Markets confirmed that a "subchapter S" corporation is not a commodity pool as defined in Rule 4.10(d)(1), and the corporation's president and vice president are not CPOs as defined in Section la (4) of the Commodity Exchange Act. The president and vice president have significant experience in the commodities industry and will be the sole investors in the corporation.
04/24/1996	96-33; ; Rule 4.7(a)(2)(iii);; No-Action The Division of Trading and Markets granted a registered CPO a forty-five day extension of time in which to comply with the annual report requirements of Rule 4.7(a)(2)(iii), where the pool's investors are authorized to withdraw from the pool at the end of any calendar month upon a least thirty-five days prior written notice to the pool. The relief was subject to the condition that the CPO inform the pool's investors about the effects of the relief.
04/23/1996	96-32 ; Section 4m(1) of the Act, Rule 4.22(c);; No-Action The Division of Trading and Markets continued to provide "no-action" relief from registration as a commodity pool operator (CPO) to a company with respect to a fund despite the fact that three additional persons acquired an ownership interest in the fund. These three additional persons have attributes similar to the persons whose ownership interests were disclosed in connection with Interpretative Letter 96-14, in which the Division first granted the company no-action relief. Further, the Division granted the company a no-action position for failure to file and distribute Annual Reports for the years ending 1995 and 1996, as required under Rule 4.22(c). This position was based on the fact that no persons other than those disclosed in connection with the CPO no-action relief letters had any ownership interests in the fund since January 1, 1995, the Annual Reports were highly confidential and prepare annual financial reports for the years ending 1995 and 1996, which would be certified by an independent public accountant and would be available to the Fund's participants and the Commission for a period of five years.
04/22/1996	96-31 ; Section 4m(1) & Rule 4.31;; No-Action The Division of Trading and Markets provided registration relief to a CPO, which was organized off-shore but wholly owned by United States persons, in connection with its operation of a foreign pool where the three owners of the CPO were already Commission registrants and the CPO represented that it would keep and make available to the Commission records equivalent to those required under Commission rules. The relief was conditioned upon the owners of the CPO remaining registered with the Commission, and the CPO's not undertaking any activity that could reasonably lead to the solicitation of United States persons to invest in the pool. In addition, the Division exempted the CTA of the pool from providing a disclosure document to the CPO based upon the fact that the one of the owners of the CPO was also the sole proprietor of the CTA and another owner of the CPO was a registered AP of the CTA.
04/12/1996	96-29 ; Rules 4.21 - 4.26;; No-Action The Division of Trading and Markets gave "no-action" relief permitting a registered commodity pool operator (CPO) to operate a Chicago Board Options Exchange market maker (organized as a limited partnership) without complying with the disclosure, reporting and recordkeeping requirements of Commission Rules 4.21 - 4.26, notwithstanding that the market maker will use Standard & Poor's 500 Stock Index futures on a restricted basis to hedge day-end imbalances in its trading portfolio. The Division also gave "no-action" relief permitting the general partner of a second limited partnership (that is itself a limited partner of the market maker) to avoid registering as a CPO, notwithstanding that the market maker's futures trading will cause the second limited partnership to be a commodity pool.
04/11/1996	96-34 ; Section 4d(2) of the Act, Commission Rule 1.17, 120-1.30, 1.32,1.36 and 30.7;; No-Action A U.S. FCM wishing to operate in Taiwan in accordance with Taiwan's Foreign Futures Trading Law (FFTL) must specifically allocate 200 million new Taiwanese dollars (NT $) as operational capital in Taiwan, of which at least NT $50 million must be deposited as a business guaranty bond in a bank designated by Taiwan's Securities and Exchange Commission. A U.S. FCM operating in Taiwan requested relief such that deposits in Taiwan could be included in current assets for U.S. regulatory capital purposes. No-action relief was provided to the FCM with respect to its failure to take a 100 percent charge against its net capital for deposits made to comply with the requirements of Taiwan's FFTL and rules promulgated thereunder in branches or subsidiary banks located in Taiwan provided that: (1) the subsidiaries or branches in Taiwan are part of an international banking institution which is organized under the law, and whose headquarters is located in and subject to the regulatory authority, of a sovereign national government where a major money market as defined by the SEC is located; (2) the commercial paper or long term debt of the international banking organization referred to above is rated in one of the two highest rating categories by Standard and Poor's Corporation of Moody's Investor Services, Inc.; (3) the FCM takes a 100 percent charge against any deposit in Taiwan to the extent of NT $50 million, or such deposit is segregated or otherwise restricted for the benefit of Taiwanese customers or otherwise, whichever amount is greater; (4) the FCM takes appropriate haircuts under CFTC Rule 1.17 with respect to non-U.S. currency, government bonds or other financial instruments deposited in Taiwan; and (5) the FCM's adjusted net capital would exceed the minimum required under CFTC Rule 1.17 even if the deposits in Taiwan were subject to a 100 percent haircut, i.e., such deposits constitute excess adjusted net capital.
03/29/1996	96-30 ; 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 non-QEPs all have been established as part of the CPO's financial and estate planning, and the CPO will make all investment decisions for the non-QEPs.
03/14/1996	96-23; ; Section 1a(ii), 2(a)(1);; No-Action In this letter, staff of the Division of Economic Analysis confirms that a contract obligating a producer to sell and deliver to an elevator a specified amount of grain at a future date which includes on its face an agreement by the elevator to purchase an exchange-traded call option is consistent with the earlier 1985 Counsel distinguishing forward contracts excluded from regulation by the Commission from "trade options" which may not be legally offered or sold for specified agricultural commodities, where the contract does not permit the option pricing feature to be reestablished once terminated, where no ""rolling"" of the option month is permitted and where the amount of the grain covered by the options cannot exceed the amount of grain to be delivered.
03/05/1996	96-22 ; Rule 4.10(c);; No-Action The Division of Trading and markets gave "no-action" relief permitting a registered CPO, on a one-year pilot-program basis and subject to specified accounting and reporting requirements, to form separate general partnerships (Account Partnerships), the partners of which would be members of a specified group of existing United States pools operated by the CPO (and each pool essentially would be fully invested in one or more Account Partnerships). Eligible pools would be limited (with one exception) to $6 million or lower net asset value and five years or more continuous operation at the time an Account Partnership is formed. Each Account partnership would trade through a single CTA trading program and each pool in an Account partnership would share pro rata in profits and losses. The CPO agreed to indemnify each pool fr losses resulting from CPO's failure to operate an Account Partnership as contemplated. All trades would be cleared through CPO-affiliated FCM, and FCM agreed to collect any deficit pro rata and to look to CPO before attempting to collect a greater-than-pro-rata share from any pool. Pool participants would be given prior notice of such pool's participation in an Account Partnership and opportunity to redeem.
03/04/1996	96-24 ; 4.10(d)(1);; No-Action The Commission's Division of Trading and Markets confirmed that a limited partnership which was composed of family members was not a commodity pool. As a result, the Division permitted the registered commodity pool operator (CPO) for the limited partnership (which at one time had contained both family and non-family members) to withdraw its CPO registration.