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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95-99;  ; Rule 4.10(d)(1);; No-Action The Division of Trading and Markets confirmed that a general partnership consisting of three partners who were business associates and industry professionals was not a commodity pool and, therefore, that no partner was a CPO. |
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| 95-107 ; Rule 4.7(a);; No-Action The Division of Trading and Markets took a no-action position that would allow a registered CPO to admit investors in a Pool who were not QEPs and still claim relief pursuant to Rule 4.7(a). The non-QEP investors fell into two general categories and were either partners, employees or persons otherwise professionally linked to the CPO or trusts in which the trustees who had investment discretion were QEPs and closely related to the beneficiaries and/or founders of the trusts in question. The Division also took a no-action position that would allow the Pool to invest more than ten percent of its assets in other Rule 4.7 exempt pools even though certain investors in the Pool would be non-QEP investors. |
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| 95-103; ; Act Section 4d; Rules 1.20 et seq.;; No-Action The Division advised that neither the Commodity Exchange Act nor the Commission's rules promulgated thereunder would be violated if a registered investment adviser ("RIA") provided cash management services to futures commission merchants ("FCMs") with respect to segregated customer funds. Such services would include purchase and sale of instruments permitted by Rule 1.25, execution of reverse repurchase agreements and consummation of reverse repurchase transactions, all pursuant to limited power of attorney given under a written advisory agreement. The RIA would not handle customer funds, securities purchased with such funds, or proceeds of sales of such securities. Each individual FCM's customer funds would be separately accounted for, and the RIA's compensation would be paid directly by its client FCM, without use of customer funds. |
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| 95-101; ; Sections 4m(l) of the Act;; No-Action The Division of Trading and Markets confirmed that sellers and developers of commodity interest trading systems are within the statutory definition of CTA contained in the Act, and thus, such persons must register as CTAs. The_ Division also expressed its view that the Supreme Court's ruling in SEC v. Lowe did not mandate a broad reading of the exclusion from the CTA definition contained in the Act so as to exclude sellers or developers of commodity interest trading systems from registration requirements. |
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| 95-100 ; Rule 4.7(a);; No-Action The Division of Trading and Markets took a no-action position that would allow a registered CPO to admit investors in a Pool who were not QEPs and continue to claim relief pursuant to Rule 4.7(a). The non-QEP investors were the Chief Administrative Officer of the CPO, and three trusts whose beneficiaries were family members of the managing member of the CPO and whose sole trustee was a QEP. The Division also took a no-action position that would allow the Pool to invest more than ten percent of its assets in other Rule 4.7 exempt pools even though certain investors in the Pool would be non-QEP investors. |
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| 95-93 ; Section 4m(1) of the Act, 7 U.S.C. 6m(1)(1994); Rule 4.14(a)(5), 17 C.F.R. 4.14(a)(5)(1995);; No-Action The Division granted a person (A) no-action releif from registration as a commodity trading advisor (CTA) under Section 4m(1) of the Act when A was asked to provide commodity trading advisory services to a general partnership while continuing to advise a commodity pool for which A had filed a statement of exemption from registration as a commodity pool operator (CPO) under Rule 4.13(a)(2) nd with respect to which A had performed commodity trading adviosry services pursuant to Rule 4.14(a)(5). Each of the general partners of the partnership had more than 2 0 years of experience as an investor in the securities markets and was an accredited investor. The partnership had been in operation for several yars, had $10 million of funds under management which were the funds of the four general partners, and intended to enter into transactions in futures an doptions on futures contracts that would require the partnership to commit, as initial margin and premium, less than one percent of its funds |
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| 95-98 ; Section 4m(1) of the CEAct;; No-Action The "Common Members" of a company whose primary business is the issuance of guaranteed investment contracts ("CIGs") and which intended to issue equity interests to fifteen unaffiliated "institutional" accredited investors were not required to register as CPOs where, among other things, the Company will open commodity interest trading accounts for bona fide hedging transactions only to hedge its market risk exposure and will not deposit as initial margin of premiums for its commodity interest transactions an aggregate amount of funds greater than three percent of the liquidation value of the Company's outstanding GIC contracts. In addition, the Common Members of the Company advising the company with respect to commodity interest trading were not required to register as CTAs where the advisors are not subject to statutory disqualification, do not provide commodity interest trading advice to any other persons or otherwise hold themselves out generally to the public at CTAs. |
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| 95-97 ; 4m(1) of the Act;; No-Action International labor union granted releif form CPO registration with respect to operation of its "General Fund" containing operating revenues of the union where, among other things: (1) the union conducts its commodity trading activities solely for hedging purposes; (2) the General Fund will not commit more than five percent of its assets for initial futures margin or option premiums; (3) the union does not market the General Fund as a commodity pool; and (4) the union is not otherwise required to register with the Commission |
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| 95-92 ; Section 4m(1);; No-Action No enforcement action recommended against the investment general partner or the administrative general partner of an off-shore fund where, among othe rthings, the administrative general partner, whose duties and responsibilities are ministerial in nature, fails to register as a Co-cpo of the fund when the investment general partner is a registered cpo and that the fund will only be available to non-United States persons |
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| 95-91 ; Section 4m(1);; No-Action No enforcement action recommended for failure to register as a CTA where: (1) the CTA is registered as an investment adviser; (2) the client would be an offshore fund with no US. persons as investors; and (3) the commodity interest trading advice would be privded ot the fund in a manner solely incidental to its business of providing securities advice to the fund, subject to the conditions that: (1) it does not otherwise act or hold itself out as a CTA; (2) the fund will be operated pursuant to the criteria of Rule 4.5(c)(2); and it will submit to such special calls as the Division may make of it to demonstrate compliance with the terms and condition of this "no-action" position |