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
11/13/1997	98-09 ; Rule 4.13(a)(2);; No-Action The Division of Trading and Markets permitted a CPO to continue to claim CPO registration relief pursuant to Rule 4.13(a)(2) in connection with the operation of a limited liability company (Company) that consisted of three members (Members) and would trade commodity interests for its own account. Although the CPO had previously filed a Notice of Claim of Exemption from CPO registration pursuant to Rule 4.13(a)(2), the members of the Company now wished to make additional capital contributions which would exceed the $200,000 limit imposed by the rule. The relief was based upon, among others, representations that: (1) each member was a Commission registrant; (2) each members was equally and actively involved in the management of the Company; (3) no intention existed to admit additional members; and (4) the company was the only commodity pool operated by the CPO.
11/12/1997	98-08 ; Rule 4.23;; No-Action The Division of Trading and Markets exempted a CPO from the requirements of Rule 4.23 to maintain the original books and records for a pool at its main business office in New Jersey based upon the conditions that: (1) the CPO notify the Division if the location of any such records changes from that a represented to the Division; (2) the CPO remains responsible for the maintenance of all required books and records and for assuring their availability to the Commission; (3) within 48 hours after as request by a duly qualified representative of the Commission, the National Futures Association or the Department of Justice, the CPO will obtain the original books and records from its branch office in New Jersey and provide them for inspection at its main business office in Tennessee; and (4) that the CPO disclose in the Disclosure Document for each pool it operators that all Commission-required books and records are kept at its branch office in New Jersey.
11/10/1997	97-98 ; Rule 4.7(a); Section 4m(1) of the Act;; No-Action CPO provided relief from the ten percent investment limitation of Rule 4.7(a)(1)(ii)(B)(2)(xi) notwithstanding an investment in the pool operated by the CPO by a limited partnership (LP) containing certain trusts that are not QEPs. Registration relief also was provided to the general partners of the LP based upon, among other things, the familial relationship among the trust beneficiaries.
10/29/1997	97-90 ; Rules 4.7(a), 4.21, 4.22(a) and 4.22(b), 4.25, and 4.26 - Exemptive Relief for CPO.;; No-Action The Division granted relief from the disclosure and reporting requirements of Rules 4.21, 4.22, 4.25, and 4.26 to a CPO in connection with its operation of a pool with respect to the participation of two employees of the CPO's advisory affiliate, each of whom had substantial experience in the financial services industry and was involved in the trading or management of the pool, and a third person who was an accredited investor and had been the executive vice-president of the CPO's advisory affiliate. The Division also granted relief from the QEP criteria of Rule 4.7 to the CPO where the proposed participants in the pool included two persons who were accredited investors and a third person who was employed as controller for both the CPO and its advisory affiliate. One of the two accredited investors was the friend and neighbor of the controlling principal of the CPO and had a net worth of $5 million. The other accredited investor was a limited partner in another pool operated by the CPO and had been the executive vice-president of the CPO's advisory affiliate.
10/29/1997	97-87 ; Rules 4.21, 4.22(a) and 4.22(b), 4.24, 4.25, and 4.26 - Exemptive Relief for CPO;; No-Action The Division of Trading and Markets granted relief from the disclosure and reporting requirements of Rules 4.21, 4.22, 4,24, 4.25, and 4.26 to a registered CPO with regard to its operation of a newly-established Fund comprised exclusively of principals and/or employees of the CPO or an entity affiliated with the CPO as advisor to the Fund where all but one of the participants in the Fund have duties with respect to the day-to-day trading and/or operation of the Fund, all of the participants adequately understand the risks of futures trading, and all of the participants will have access to the books and records of the Fund. The one participant who does not have daily duties with respect to the Fund is himself a QEP and the controlling principal of both the CPO and its affiliate.
10/27/1997	97-89 ; Section 4(m) (1) - CPO Registration;; No-Action The Division of Trading and Markets took a CPO and CTA registration no-action position with respect to the managing member of a pool that was established for the estate planning purposes of a single family. The pool was not marketed to the public and the managing member's commodity interest trading advice was solely incidental to his provision of securities advice to the pool.
10/17/1997	97-84 ; Section 4.7(a) - Exemptive Relief for CPO's;; No-Action The Division of Trading and Markets granted continued relief under Rule 4.7 fa) to a registered CPO/CTA notwithstanding the admission of a non-QEP into a Pool operated by the CPO. The non-QEP, who has more than 3 0 years of investment experience, is the father of the CPO's president, sole shareholder, and sole director. The Division granted the relief subject to the condition that the non-QEP consent in writing to being treated as a QEP.
10/10/1997	97-88 ; 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 entities for which the advice was being provided, two Canadian funds having no U.S. investors, were not qualifying entities under Rule 4.5. The advisor 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.
10/08/1997	97-85 ; Section 4d of the Act;; No-Action Separately incorporated affiliates of a bank affiliate FCM that refers business to the FCM not required to register as IBs or otherwise where, among other things: (1) each affiliate was subject to regulation by regulatory authorities other than the Commission; (2) all employees of the affiliates engaged in referring commodity business to the FCM will be registered as APs of the FCM; (3) each office of each affiliate will be identified as a branch office of the FCM for registration purposes; (4) existing principals or APs of the FCM will supervise the commodity interest-related activities of affiliate's employees; and (5) the affiliates agree to be jointly and severally liable with the FCM for any violations of the Act or regulations committed by the affiliate's employees.
09/29/1997	97-79 ; Section 4m(1) - CPO Registration;; No-Action The Division of Trading and Markets provided a CPO registration no-action position for a general partner of a fund where: the general partner was affiliated with a registered FCM; the CTA for the fund was also affiliated with the general partner; each investor in the fund was and would be an accredited investor; the fund would commit no more than two percent of its net asset value to establish commodity interest positions; the minimum investment in the fund was $500,000; the fund would trade commodity interests solely for bona fide hedging purposes; the fund would not be marketed as a commodity pool; and, the general partner did not and would not serve as the CPO to any other commodity pool. The Division conditioned the relief by requiring the general partner and the CTA of the fund to provide the Division with a signed acknowledgment whereby each party accepts joint and several liability with the other for any violation of the Act or the Commission's rules issued thereunder applicable to CPOs.