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
09/29/1998	98-71 ; Section 4(b);; No-Action In light of the Commission's recent concept release concerning foreign board of trade computer terminal placement in the U.S., the Division of Trading and Markets (Division) declined to issue a no-action position to an FCM concerning customer use of order entry systems (OES) to purchase products on a foreign board of trade. The FCM had requested that the Division not recommend enforcement action to the Commission if the FCM or its affiliates provided access to order entry systems to certain of the FCM's customers where the OES would be located outside the U.S. The Division stated its belief that it is not appropriate for it to formulate policies concerning OES use via issuance of no-action letters, but rather it intends to address these issues in conjunction with the Commission's ongoing rulemaking process regarding electronic access to foreign boards of trade.
09/24/1998	98-69 ; Rule 4.7(a) - Exemptive Reliefs for CPOs;; No-Action The Division of Trading and Markets provided exemptive relief to a registered CPO to permit it to accept the investments of two individuals who are not QEPs into a Rule 4.7 commodity pool to be organized by the CPO. The two individuals each own a one-third interest in the CPO and are officers, registered APs and listed principals of the CPO. The relief was granted based upon representations that the non-QEPs will consent to being treated as QEPs for purposes of investing in the pool and have or will be provided with access to all information pertinent to an investment in the pool.
09/18/1998	98-68 ; 4m(l);; No-Action The Division of Trading and Markets denied a request for relief from the commodity pool operator registration requirement of Section 4m(1) of the Act by the managing member and the solicitor of two securities investment limited liability companies where the request was based on representations that the amount used by the companies for commodity interest trading would not exceed 5% of the fair market value of the companies' assets. The Division stated that there currently is no exception to the obligation to register as a commodity pool operator based on the fact that a fund makes only de minimis investments in commodity interests and took the position that the notice and comment rulemaking process, rather than a request for a no-action position, is the appropriate method by which to evaluate whether such an exception would be consistent with the Act and in the public interest. The requestor was invited to file a petition for rulemaking. In addition, the requestor was reminded of the commodity pool operator registration requirement for any personal operating any investment trust, syndicate or similar form of enterprise for the purpose of trading commodity interests.
09/15/1998	98-67 ; Rule 4.7(a);; No-Action The Division of Trading and Markets permitted a registered CPO to treat two non-QEP employees as QEPs. The non-QEPs are a senior-level director and an officer of the CPO who perform as the Chief Financial Officer and Director of Research for the CPO and who have ready access to information pertinent to an investment in the pools. In addition, the Division permitted the CPO to treat the non-QEP employees as QEPs for the purpose of investing in any other pool which the CPO currently operates or advises and continues to operate or advise in the future. These exemptions are, however, subject to the condition that at the time a non-QEP employee seeks to invest in another pool, he or she must be employed by the CPO in a position that is the same or substantially the same as that which he or she currently holds.
08/26/1998	98-64; ; Rule 4.7(a);; No-Action The Division of Trading and Markets provided exemptive relief under Rule 4.7(a) to a registered CPO, notwithstanding the presence of non-QEPs in its pools, where the non-QEPs are employees of an affiliated company of the CPO. The non-QEPs are either directors, officers, traders or analysts for the affiliated company. The non-QEPs have ready access to information pertinent to an investment in the pool and agree to being treated as QEPs.
08/24/1998	98-65 ; Rule 4.7(a);; No-Action The Division of Trading and Markets permitted two registered CPOs to treat certain non-QEPs as QEPs for the purpose of investing in Rule 4.7 exempt pools the CPOs operate. One of the non-QEPs was a registered AP, principal and CEO of the CPOs and the other non-QEP was a registered AP, principal and Director of Investor Relations of the CPOs. This exemption was subject to the condition that the non-QEPs will have access to the books and records pertinent to an investment in the pools.
08/21/1998	98-70 ; Section 4(b);; No-Action The Division of Trading and Markets (Division) issued a letter to Eurex Deutschland (formerly the Deutsche Terminborse and referred to herein and in the letter as DTB) concerning an upcoming DTB rule change that would allow the use of order routing systems (including from U.S. locations) to enter orders on the DTB. The Division noted that in light of the Commission's recent concept release concerning the placement of foreign board of trade electronic trading systems in the U.S., the Division issued a letter to the DTB dated June 3, 1998 that was intended to maintain the status quo with respect to DTB's operations and trading in the U.S. The Division stated its view that a rule change permitting the use of order routing systems in the U.S. would upset the status quo and requested that the DTB issue a letter to its members and sales force stating that its current rules concerning order entry shall remain in effect as to customers and other DTB traders in the U.S. until the Commission further addresses the issue.
08/21/1998	98-61 ; Section 4(b);; No-Action Denial of No-Action Relief - The Division of Trading and Markets (Division) determined not to issue a no-action letter to a limited liability company (LLC) that was seeking Deutsche Terminborse (DTB) membership in order to place DTB computer terminals in its offices after approval of its DTB membership but prior to the Commission's completion of its rulemaking process regarding the placement of foreign board of trade electronic trading systems in the U.S. The LLC had been formed for the purpose of carrying out the proprietary trading activities of a U.S. FCM (owned by the same persons that own the LLC) that is already a DTB member and currently uses DTB trading terminals in its offices. The Division noted that in light of the Commission's recent concept release concerning placement of foreign board of trade electronic trading systems in the U.S., the Division issued a letter to the DTB dated June 3, 1998, that was intended to maintain the status quo and to prevent new DTB members from using DTB terminals in the U.S. until the Commission further addresses these issues.
08/19/1998	98-62 ; Section 4(b);; No-Action Denial of No-Action Relief - The Division of Trading and Markets (Division) determined not to issue a no-action letter to a U.S. FCM that was seeking Deutsche Terminborse (DTB) membership in order to place DTB computer terminals in its offices after approval of its DTB membership but prior to the Commission's completion of its rulemaking process regarding the placement of foreign board of trade electronic systems in the U.S. The Division noted that in light of the Commission's recent concept release concerning the placement of such electronic trading systems in the U.S., the Division issued a letter to the DTB dated June 3, 1998, that was intended to maintain the status quo and to prevent new members of the DTB from using DTB terminals in the U.S. until the Commission further addresses these issues.
08/17/1998	98-63 ; Rules 4.7(a), 4.21, 4.22, 4.23(a)(3), 4.23(a)(10), 4.23(a)(11);; No-Action The Division of Trading and Markets permitted a registered CPO to treat a non-QEP as a QEP. The non-QEP is a general partnership comprised solely of senior-level employees of the CPO, who have ready access to information pertinent to an investment in the pool. In addition, the Division provided exemptive relief from the CPO disclosure, reporting and recordkeeping requirements of Rules 4.21, 4.22, 4.23(a)(3), 4.23(a)(10) and 4.23(a)(11) to the managing general partner of the employee partnership, who also is registered CPO.