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
02/27/2002	02-14 ; Rule 4.7;; No-Action The CPO of a 4.7 fund of funds pool requested permission to provide quarterly reports to participants, as required by Rule 4.7(b)(2), 45 calendar days after the end of the reporting period, rather than 30 calendar days after quarter-end. The exemption was granted based on the fact that, after substantial efforts were made and due to reasons beyond the control of the CPO, the financial information could not be received earlier from the offshore sub-funds.
02/27/2002	02-13 ; Rule 4.7;; No-Action The CPO of a 4.7 fund of funds pool requested permission to provide quarterly reports to participants, as required by Rule 4.7(b)(2), 45 calendar days after the end of the reporting period, rather than 30 calendar days after the quarter-end. The exemption was granted based on the fact that, after substantial efforts were made and due to reasons beyond the control of the CPO, the financial information could not be received earlier from the offshore sub-funds.
02/25/2002	02-12 ; Rule 4.22(c) & (d);; No-Action The CPO of a small fund requested exemption from filing a certified Annual Report for year ending December 2001. The participants submitted statements in support of the exemption. The exemption was based on the size of the fund, the closely held nature of the fund and the fund was not soliciting or accepting new participants.
02/25/2002	02-11 ; Rule 4.22(c) & (d);; No-Action The CPO of a small fund requested exemption from filing a certified Annual Report for year ending December 2001. The participants submitted statements in support of the exemption. The exemption was based on the size of the fund, the closely held nature of the fund and the fund was not soliciting or accepting new participants.
02/19/2002	02-10 ; 4.22(d);; No-Action The CPO of a pool ceased trading in April 2001 closing the pool and liquidating the units of ownership. The CPO requested exemption from the requirement of Rule 4.22(d) that the pool's 2001 Annual Report be audited. The participants submitted statements in support of the exemption. The exemption was granted upon condition that an unaudited 2001 annual report be provided to the participants, NFA and CFTC.
02/14/2002	02-09 ; 4.22(d);; No-Action The CPO of a pool ceased trading in April 2001 closing the pool and the single investor's funds were distributed. The CPO requested exemption from the requirement of Rule 4.22(d) that the pool's 2001 Annual Report be audited. The participant submitted a statement in support of the exemption. The exemption was granted upon condition that an unaudited 2001 annual report be provided to the participant, NFA and CFTC.
02/05/2002	02-08 ; Section 4m(1);; No-Action The Division of Trading and Markets issued a no-action position concerning CTA registration to a producer of live video and audio signals over the Internet who proposed to contract with each of several designated contract markets to provide, for a fee, unedited live video and audio coverage of the trading action on the floor of the contract market, accompanied by only generic factual commentary.
01/24/2002	02-07 ; Section 4m(1) of the Act; Rule 4.13(a)(1)(i);; No-Action The Division of Trading and Markets provided CPO registration no-action relief and confirmed the availability of CTA registration relief under section 4m(1) to an operator and the adviser, respectively, of a family fund. In so doing, the Division determined that one of the operators could not claim exemption from CPO registration under Rule 4.13(a)(1) because she received compensation as a principal of the fund's CTA.
01/24/2002	02-06 ; Regulations 4.21 and 4.22;; No-Action The Division of Trading and Markets provided exemptive relief to a registered CPO from the disclosure, periodic, and annual reporting requirements of Rules 4.21 and 4.22 in connection with its operation of two master funds. Master Fund I has as it only participants two feeder funds also operated by the CPO. Master Fund II has as its only participant Master Fund I. The relief is subject to the conditions that: (i) the CPO remain the CPO of the Master Funds and the Feeder Funds, (ii) participation in Master Fund I is limited to the two Feeder Funds; (iii) participation in Master Fund II is limited to Master Fund I; and (iv) the annual reports of the Feeder Funds contain financial statements that include, among other information, the fees associated with the operation of the Master Funds.
01/08/2002	02-05 ; Section 2(c) of the Act;; No-Action The Division of Trading and Markets responded to an inquiry about the regulation of the foreign currency market by a registered FCM offering trading in off-exchange foreign currency to retail customers. The Division indicated that the Commodity Futures Modernization Act of 2000 had amended the Commodity Exchange Act to make clear that the offering of off-exchange foreign currency futures and options contracts to retail customers is unlawful unless the counterparty is a regulated entity enumerated in the Commodity Exchange Act, such as a registered FCM. The Division noted that licensees of the FCM's software trading platform would not be affiliates of the FCM so as to qualify as one of the enumerated counterparties for retail foreign currency trading under the Act. Additionally, the Division indicated that the terms of the customer agreement between the licensees and the customers and the manner in which the licensees are operated, in particular the fact that the licensees operate under their own names without any reference to the FCM's role in the transactions and receive customer monies in the name of the licensees, have the indicia of the licensees being the counterparties to the retail customers. Accordingly, the Division stated that the licensees, to continue operating as they are currently, must be one of the enumerated counterparties under Section 2(c)(2)(B)(ii) of the Act. The FCM, in addition to offering trading to retail customers as counterparty, was also providing a second trading platform through which retail customers could trade directly with one another. The Division indicated that, to the extent that retail customers, trading through this second platform, become counterparties to one another, such transactions would fail to meet the requirement that the counterparty to a retail customer must be one of the entities enumerated under Section 2(c)(2)(B)(ii) of the Act and would, therefore, violate Section 4(a) of the Act.