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
11/12/1999	99-69 ; Section 5 and 5a of the Act;; No-Action The Division of Trading and Markets issued a letter granting no-action relief to permit the International Petroleum Exchange of London Limited to make its electronic trading and order matching system, known as Energy Trading System II, available to its members in the U.S. without obtaining contract market designation pursuant to Section 5 and 5a of the CEA.
10/07/1999	99-47 ; Section 4d(c) of the Act -- No-Action Position from FCM Registration;; No-Action The Division of Trading and Markets issued an FCM registration no-action position to a registered IB and broker-dealer in order to permit it to effect the transfer of funds between its customers' securities and commodity interest accounts upon oral request from its customers where: (1) the 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 the IB's total revenue is derived from commodity interest-related activity; and (3) the IB 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 the IB adopt certain specified procedures designed to safeguard those customer funds required to be segregated, including detailed recordkeeping requirements concerning any transfer of funds.
09/29/1999	99-46 ; Section 4m(1) of the Act;; No-Action The Division of Trading and Markets issued a CPO registration no-action position to the general partners of a general partnership based upon representations, among other things, that: (1) the general partners were established by family members of estate planning purposes, particularly for providing charitable contributions; (2) each family member was or is a QEP; and (3) all general partners have equal access to the books and records of the partnership. The Division also issued a CTA registration no-action position to the adviser of the partnership based upon, among others, representations that: (1) the sole business of the adviser is to make all of the investment decisions for, and manage the assets of, the partnership and other family partnerships; (2) the adviser is wholly owned by a company whose sole business is to provide financial and investment management services to members of the family; (3) each shareholder of the company is a family member, a direct lineal descendent of a family member or a brother of four of the family members and his direct lineal descendents; (4) nine of the directors of the company also are shareholders of the company; (5) two of the directors of the company are the spouses of shareholders of the company; and (6) the remaining two directors of the company have been employed by the company and the adviser for over five and one-half years. The partnership would invest in, and the adviser would provide advice on investing in, commodity pools operated by registered CPOs.
09/15/1999	99-58 ; Rule 4.7(a);; No-Action The Division of Trading and Markets granted a CPO an exemption such that it may treat as QEPs five non-QEP employees ("Non-QEPs") of a wholly-owned affiliate of the CPO ("CPO Affiliate") that researches investments and executes trades for the CPO's pools. The Division took this position because, among other things, the CPO represented that each of the Non-QEPs is a knowledgeable employee under the Investment Company Act of 1940, in that each Non-QEP: (i) is an executive officer of the CPO Affiliate, or (ii) regularly participates in the CPO Affiliate's investment activities and has been participating in the CPO Affiliate's or a previous employer's investment activities for at least twelve months.
09/15/1999	99-45 ; Section 4m(1);; No-Action The Division of Trading and Markets issued a CPO registration no-action position to the operator of a fund where: (1) each member is effectively an immediate family member or long-term associate of another member; (2) two of the three non-managing members of the fund are registered CPOs; and (3) the third non-managing member is a spouse of one of the other non-managing members.
09/15/1999	99-44 ; Section 1(a)(5) - CTA Definition;; No-Action The Division of Trading and Markets issued an interpretation that the statutory definition of the term "commodity trading advisor" would not be implicated with respect to an independent natural gas and electricity company, where the company intended to trade commodity interests to hedge price risk arising from its own commercial dealings - specifically, its purchases or sales of natural gas.
09/15/1999	99-43 ; Section 4m(1) - No-Action Position from CPO Registration;; No-Action The Division of Trading and Markets (Division) issued a CPO registration no-action position to the General Partner of a Partnership that serves as a collective investment vehicle for immediate family members and one long-term advisor to the family where the Partnership is the sole collective investment vehicle trading commodity interests that is being operated by the General Partner. The Division also confirmed that while the General Partner will become a CTA, the General Partner is exempt from registration pursuant to Section 4m(1) of the Act inasmuch as it is not holding itself out to the public as a CTA and is providing advice as to the value of or the advisability to trading commodity interests to less than 15 persons.
08/31/1999	99-39 ; Rule 4.22 (c), (d);; No-Action Requesting on behalf of a Partnership an exemption from filing a certified final report due to the small number of limited partners and the net asset value of the Partnership on April 17, 1999, in relation to the time and expense of providing an annual certified report, and due to each partner agreeing to waive the audit requirement. CFTC has granted this exemption provided the Partnership files an unaudited annual report for the Partnership for the year ending December 31, 1999, with the Commission and NFA and complies with all other requirements of regulation 4.22
08/31/1999	99-38 ; Rule 4.22 (c), (d);; No-Action Requesting on behalf of a CPO an exemption from filing a certified final report in order to save shareholders the expense that they all agree is not necessary for their protection. CFTC has granted this exemption provided the CPO distributes to participants and files copies with the Commission and NFA an unaudited report for the period ended with the permanent cessation of trading.
08/27/1999	99-41 ; Rule 4.13(a)(2);; No-Action The Division of Trading and Markets exempted two CPOs from the $200,000 limitation on total gross capital contributions of Rule 4.13(a)(2)(i), such that the CPOs could exclude their contributions and the contribution of the spouse of one of the CPOs for the purpose of determining whether the $200,000 limitation had been exceeded. In taking this action, the Division reviewed and compared the text of paragraphs (a)(2)(i) and (a)(2)(ii) of Rule 4.13 and noted that, at least with respect to pools with relatively limited net asset value (as was the case here), the text of paragraphs could result in an inconsistent application of the rule.