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
10/25/2004	04-31 ; Section 5 and 5a of the CEA;; No-Action The Division of Market Oversight issued a letter amending the no-action relief granted August 10, 1999, permitting Eurex Deutschland (Eurex) members to install additional electronic trading terminals in the U.S., to list certain new contracts for trading from Eurex terminals in the U.S., and to authorize the use of automated order routing systems without obtaining contract market designation pursuant to sections 5 and 5a of the CEA. The amendment permits participants of the Clearing Corporation (CCorp) to carry positions in Eurex products pursuant to the Euro-link agreement between CCorp and Eurex Clearing AG without Eurex obtaining contract market designation or registration as a derivatives transaction execution facility pursuant to sections 5 and 5a of the CEA.
10/22/2004	04-30 ; Rule 4.23;; No-Action The Division of Clearing and Intermediary Oversight exempted a CPO from the requirement of rule 4.23 that the CPO maintain certain books and records at its main business address. The exemption is subject to the conditions that: (1) the CPO will notify the Division if the location of any original books and records changes; (2) the CPO remains responsible for ensuring that all books and records required by rule 4.23 are maintained in accordance with rule 1.31 and for assuring their availability to the Commission, NFA, or any other agency authorized to review such books and records in accordance with the Commission's regulations; (3) within 48 hours after a request by a representative of the foregoing, the CPO will obtain the original books and records and provide them for inspection at its main business address if the representative chooses to inspect them there; (4) the CPO discloses in its Disclosure Document where all books and records required by rule 4.23 are kept; and (5) the CPO remains fully responsible for compliance with rule 4.23, other than with respect to the rule's location requirement.
10/15/2004	04-28 ; Rule 3.12(g);; No-Action The Division of Clearing and Intermediary Oversight denied a request by a registered CTA for relief from the requirement that persons who solicit accounts on behalf of the CTA be registered as APs of the CTA. Because the CTA places orders on behalf of certain of its clients pursuant to a power of attorney, which grants the CTA full authority to effect commodity interest transactions on its clients' behalf, the CTA is engaged in the solicitation of discretionary accounts as contemplated by Section 4k(3) of the Act and rule 1.3(aa)(4). Consequently, notwithstanding the fact that the CTA may confirm each trade before placing any orders on its clients' behalf, persons who solicit accounts on behalf of the CTA must be registered as APs of the CTA.
10/01/2004	04-29 ; Section 17 - Registered Futures Associations: Application Procedures;; No-Action The Division of Clearing and Intermediary Oversight declined to remove information about employment with a disciplined firm from an associated person's (AP's) registration record. The AP argued that he had not actually accepted employment or started working for the disciplined firm. In refusing the AP's request, the Division noted that the NFA registration file information was factually correct, would not prevent the AP from working as an AP, and could be accompanied by an explanatory statement submitted by the AP.
10/01/2004	04-27 ; 4d(b) of the CEAct & Regulation 1.20;; No-Action Two futures commission merchants requested that they be permitted to deduct bank fees for customer-segregated bank accounts directly from such accounts in which customer funds were held. Bank fees for the maintenance of such accounts are expenses of the futures commission merchant and not of its customers. Section 4d(b) of the Commodity Exchange Act prohibits any person, including any depository, that has received money, securities or property in a segregated account from holding, disposing of or using any such money, securities or property as belonging to the depositing futures commission merchant or any person other than the customers of such futures commission merchant. Based on the Division's determination that the fees in questions were de minimus, that the futures commission merchants in question maintained excess funds in segregation and had residual interests in the funds in segregated accounts greater than such fees, and that the administrative burden upon such futures commission merchants to pay such fees separately from other non-segregated accounts therefore appeared unnecessary, the Division issued two no-actions letters to the respective futures commission merchants with respect to the payment of such fees directly from the customer-segregated bank accounts upon the conditions specified therein.
10/01/2004	04-26 ; 4d(b) of the CEAct & Regulation 1.20;; No-Action Two futures commission merchants requested that they be permitted to deduct bank fees for customer-segregated bank accounts directly from such accounts in which customer funds were held. Bank fees for the maintenance of such accounts are expenses of the futures commission merchant and not of its customers. Section 4d(b) of the Commodity Exchange Act prohibits any person, including any depository, that has received money, securities or property in a segregated account from holding, disposing of or using any such money, securities or property as belonging to the depositing futures commission merchant or any person other than the customers of such futures commission merchant. Based on the Division's determination that the fees in questions were de minimus, that the futures commission merchants in question maintained excess funds in segregation and had residual interests in the funds in segregated accounts greater than such fees, and that the administrative burden upon such futures commission merchants to pay such fees separately from other non-segregated accounts therefore appeared unnecessary, the Division issued two no-actions letters to the respective futures commission merchants with respect to the payment of such fees directly from the customer-segregated bank accounts upon the conditions specified therein.
09/16/2004	04-34 ; Section 1a(23); Regulation 1.3(mm);; No-Action The Division of Clearing and Intermediary Oversight confirmed that it would not recommend that the Commission commence an enforcement action against a software vendor based on its failure to register as an introducing broker in connection with its marketing of a software program with the ability to access the order-entry system of the futures commission merchant (FCM) or introducing broker (IB) of the end users' choice. This relief is subject to the conditions that: (1) the data feeds containing market information are provided by unaffiliated third parties who do not give compensation to, or receive compensation from, the software provider or its affiliate for providing market data to customers; (2) the software does not provide express "buy" or "sell" signals; (3) customers' will select their own FCMs or IBs and negotiate any and all fees for executing trades between themselves and the FCM or IB; (4) the software provider will not solicit orders for, or recommend, propose, or encourage customers to use, any particular FCM or IB; (4) the software will reside on customers' computers and the orders will go directly from the end user to the executing FCM or IB without the software provider seeing details of an individual order; and (5) the software provider will be compensated by fees that are paid to it by the customer, and are not associated with the fees charged by the FCM or IB for the placement of customer orders.
09/07/2004	04-25 ; Sections 4d and 4k(1) of the CEAct;; No-Action The Division of Clearing and Intermediary Oversight issued an interpretation that because a consulting firm and its sole member are not engaged in soliciting or accepting customer orders, the firm and its sole member are not required to be registered as an IB or AP, respectively. The Division's opinion is based primarily on representations that: (1) the firm would be compensated for its various consulting services and not for referring clients to any FCM; (2) the firm would not be in any way involved with order flow; and (3) the firm would not be compensated on a per-order basis or by a referral fee.
08/30/2004	04-24 ; Section 2(a);; No-Action Request for no-action relief in connection with the offer and sale in the United States of the S&P/MIB Index Futures Contract and miniFutures Contract traded on the Mercato Italino dei Derivati.
08/25/2004	04-23 ; Rule 4.10(d); No-Action The Division of Clearing and Intermediary Oversight declined to confirm that non-natural person bank account holders (Family Entities) formed by, or for the direct or indirect benefit of, wealthy family members, and in some cases long-term employees and advisers of the family members, are not pools. Requester failed to specify eligibility criteria for participants of Family Entities when asked to do so by Division staff.