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
01/30/2001	01-05 ; 4.22(c) and (d);; No-Action The CPO of a pool, in which all of the participants in the pool were principals of the CPO or close family members, requested exemption from filing a certified Annual Report. The participants submitted consent waiver statements in support of the exemption. That exemption was granted. Further, as long as the pool continues to do business without soliciting unaffiliated participants, the CPO need not make the same claim for relief each year.
01/25/2001	01-04 ; 4.22(c) & (d);; No-Action The CPO of a pool dissolved after four months of trading and requested exemption from the requirement of Rules 4.22(c) and (d) that the pool distribute an audited Annual Report. Based on the unique circumstances associated with this Pool, specifically the proprietary nature of the pool, the only participant (the sponsor/manager of the pool) was not required to file a supporting statement or distribute an unaudited report to itself.
01/17/2001	01-01 ; 4.22(c) & (d);; No-Action The CPO of a pool made final distributions as of July 2000, and requested exemption from the requirement of Rules 4.22(c) and (d) that the pool's 2000 Annual Report be audited. The participants submitted consent waiver statements in support of the exemption.
01/16/2001	01-03 ; Regulations 4.7(b)(2) and 4.7(b)(3);; No-Action The Division of Trading and Markets provided exemptive relief to a registered CPO (CPO X) from the periodic and annual reporting requirements of Rules 4.7(b)(2) and 4.7(b)(3) in connection with its operation of a master fund that has as its sole participants two feeder funds. CPO X serves as the CPO of one of the feeder funds and CPO Y serves as the CPO of the other feeder fund. Both CPOs share the same managing members. Accordingly, the Division reasoned that requiring CPO X to provide periodic and annual reports would, in the one instance, be requiring it to provide information to itself, and, in the second instance, effectively be requiring it to provide information to itself since both CPOs have the same managing members. Relief is subject to the conditions that: (i) CPO X and CPO Y remain the CPOs of the respective funds, and the managing members of CPO X and CPO Y remain the same; (ii) participation in the Master Fund is limited to the two feeder funds; and (iii) the annual report of the feeder funds contain financial statements that include, among other information, the fees associated with the operation of the Master Fund.
01/11/2001	01-07 ; Section 4m(1);; No-Action The Division of Trading and Markets confirmed an existing CPO registration no-action position for one of two general partners (administrative general partner) of a pool where the other general partner (managing general partner) was a registered CPO if tax-exempt U.S. persons (who are QEPs) participate in the pool. At the same time, the Division took a CPO registration no-action position for the directors of the fund through which investors participate in the pool involved in the original no-action position. The Division further provided for extension of this position to cover investment by U.S. tax exempt investors through the fund in future pools operated by the general partners under the same circumstances. These positions were conditioned upon: (1) the managing general partner remaining CPO registered; (2) U.S. persons engaged in investor solicitation being registered as APs; (3) cross acknowledgement by both general partners of joint and several liability for CEA or Commission rule violations; (4) cross acknowledgement by the directors of the fund and by the managing general partner of joint and several liability for CEA and Commission rule violations; and (5) no statutory disqualification on the part of the fund's directors who are U.S. persons.
12/08/2000	00-107 ; 4.22(d);; No-Action The CPO of a pool ceased trading in September 2000 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 2000 Annual Report be audited. The participants submitted consent waiver statements in support of the exemption. The exemption was granted upon condition that an unaudited 2000 Annual Report be provided to the participants, NFA and CFTC.
12/04/2000	00-108 ; Part 35 of the Commission's rules;; No-Action On December 4, 2000, the Division of Trading and Markets issued a letter granting no-action relief in connection with the operation of U.K.-based electronic trading platform for the trading of certain agreements on physical commodities for which there is no futures contract traded on any exchange in the U.S. or any other member country of the Organisation for Economic Co-Operation and Development. The platform will utilize an electronic trading and matching system that can be accessed through the Internet, and it will be available only to approved participants and authorized brokers entering orders on their behalf. Participants will be limited to commercial entities that qualify as "eligible participants" under specified provisions of Part 35 of the Commission's rules. The operation of the platform is subjected to oversight by U.K. authorities.
12/01/2000	01-02 ; Section 4d(2) of the Act -- No-Action Position from FCM Registration;; No-Action The Division of Trading and Markets confirmed the continuation of an FCM registration no-action position to a registered IB (IB1) that had acquired the commodity interest trading business of another now-defunct IB (IB2). The FCM registration no-action position permits IB1, just as it had permitted IB2, to affect the transfer of funds via check from customers' securities to commodity interest accounts upon oral request. The no-action additionally permits IB1 to affect the transfer of funds via wire transfer from customers' securities to commodity interest accounts and to use an armored courier for the retrieval and delivery of checks. The relief was granted based upon representations made by IB1 that: 1) customers have provided pre-authorization in writing permitting the transfer of funds both ways between their commodity interest and securities accounts; 2) less than one percent of IB1's total revenue is derived from commodity interest-related activity; and 3) IB1 is not advertising its commodity interest-related activity but instead is offering these services to existing securities customers merely as a courtesy. The relief was granted on condition that IB1 adopt specified procedures designed to safeguard those customer funds required to be segregated, including detailed recordkeeping requirements concerning any transfers of funds.
11/22/2000	00-106 ; 7 U.S.C. Section 4d(2);; No-Action Requestor inquired concerning: 1) the obligations of an FCM that is unable to meet its obligation to customers, but subsequently receives additional funds or property, and 2) the effect of the assignment of such obligation by a customer to a third party. The Division of Trading and Markets noted the prohibition against the use of the funds or property of any customer to purchase, margin, guarantee, or settle the trades or contracts or extend the credit of any other customer. This prohibition, taken together with the requirement that the funds and property of every customer be segregated and treated as belonging to such customer, mandates that if the segregated balance of any one customer falls into a deficit, the FCM must restore the amount of such deficit out of its own funds. This obligation continues even though an FCM does not possess sufficient funds to satisfy it. Any funds subsequently obtained by the FCM must be applied to this obligation. None of the foregoing principles is affected by an assignment, valid under state law, by a customer to a third party of the customer's claim against the FCM
11/16/2000	00-104 ; Section 5 and 5a of the CEA;; No-Action The Division of Trading and Markets (Division) issued a letter granting no-action relief to permit Eurex Zurich Ltd. (Eurex CH) to make its electronic trading and order matching system, known as the System, available to its members in the U.S. without obtaining contract market designation pursuant to Section 5 and 5a of the CEA. Specially, the Division agreed not to recommend that the Commission institute enforcement action against Eurex CH or its members if Eurex CH makes the System available to its members: 1) who wish to trade for their proprietary accounts through the System in the Unites States; 2) who are registered futures commission merchants (FCMs) or who are exempt from registration pursuant to Rule 30.10 (Rule 30.10 Firms) and who wish to submit orders from U.S. customers for transmission to the System; and/or 3) who are registered FCMs or Rule 30.10 Firms who wish to accept orders from U.S. customers through automated order routing systems for submission to the System. The Division's no-action position is limited to contracts specifically delineated in the letter and is subject to compliance with the terms and conditions set forth therein.