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
01/25/1999	99-07 ; Section 4d of the Act;; No-Action The Division of Trading and Markets (Division) issued an interpretation to a company that wished to enter into futures and options contracts on behalf of farmers as part of the company's proposed grain marketing and price hedging services that the company would likely be required to register as a futures commission merchant to offer the services as proposed. The company intended to enter the futures and options trades on behalf of farmers through a company account and to advance to the farmers the financing needed to margin these positions. The Division further noted that alternative ways of structuring the proposed services may trigger other registration requirements under the Commodity Exchange Act (Act). The Division also pointed out that if implemented as described, the services may violate provisions of the Act and Commission rules beyond those related to registration.
01/11/1999	99-20 ; Rule 4.7(a);; No-Action The Commission exempted a registered CPO and CTA from certain Part 4 rules such that: (1) it could file the annual reports of certain "funds of funds" (a) within 135 days after year end with respect to those funds that invest only in other domestic investee vehicles, and b) within 155 days after year end with respect to those funds that invest in offshore investee vehicles, rather than within 90 days after year end as required by Rule 4.7; and (2) certain of the funds' books and records could be maintained at the offices of the funds' administrators, custodians or trustees rather than at the main business office of the CPO/CTA.
12/30/1998	99-04 ; Rule 4.14(a)(8);; No-Action The Division confirmed a prior no-action position it had issued to a registered investment adviser, such that the adviser could continue to claim an exemption from CTA registration under Rule 4.14(a)(8), notwithstanding the fact that it could not meet all of the criteria of the rule because it was operating a pool for key, senior employees pursuant to Rule 4.13(a)(1).
12/23/1998	99-03 ; Rule 4.7;; No-Action The Division permitted a registered CPO to treat three employees as QEPs for the purpose of participating in a Rule 4.7 exempt pool the CPO operated, where, among other things, each employee: (1) was a senior officer of the CPO; (2) had been employed in the financial services industry for many years; and (3) was an "accredited investor" under Regulation D of the Securities Act of 1933.
12/23/1998	99-02 ; Section 4d of the Act;; No-Action The Division of Trading and Markets (Division) affirmed its previous interpretation that a party who refers potential customers either directly or by providing lists of names to a Commission registrant in return for direct or indirect compensation must register as an introducing broker (IB). The Division also confirmed that the IB registration requirements could apply to persons who sponsor futures related seminars that are attended by associated persons (APs) of Commission registrants and stated that permitting registrants to send APs to seminar for a fee in order to solicit other attendees may itself constitute a referral by a seminar sponsor.
12/23/1998	99-01 ; Rule 1.57 (a);; No-Action The Division of Trading and Markets (Division) expressed its view that, if an entity is registered as both a guaranteed introducing broker (IBG) and a commodity pool operator (CPO) and clearly separates its activities such that, when it is performing CPO functions, it is not also acting as an introducing broker, then the restriction of Commission Rule 1.57(a) would not apply with respect to a pool account. Rule 1.57(a) requires generally that an IBG introduce all customer accounts to its guarantor futures commission merchant on a fully-disclosed basis.
12/22/1998	99-08 ; Regulation 30.4;; No-Action The Division of Trading and Markets (Division) issued a no-action position to a foreign firm with a U.S. branch regarding its clearing activities for an electronic foreign exchange with terminals located in the United States. The firm requested the Division to confirm that it would not recommend an enforcement action against the firm for failing to register as an FCM or to obtain confirmation of Rule 30.10 relief if the firm cleared the proprietary trades of exchange members who were not FCMs, as well as trades placed by FCMs for their own account and on behalf of United States foreign futures and foreign options customers. The Division confirmed a no-action position with regard to clearing the trades for FCM customer omnibus accounts in accordance with prior interpretative letters. The Division also declined to address the issue of clearing proprietary trades of registered FCMs. In addition, the Division declined to issue a no-action position with regard to clearing trades for non-FCM exchange members' proprietary accounts.
12/14/1998	98-83 ; Rule 4.7;; No-Action A registered CPO previously was permitted to file a Rule 4.7 Notice of Claim for Exemption where its pool had two classes of shares - Class A, owned by Non-QEPs, and Class B, owned by QEPs - based upon representations that the Class A shareholders would continue to receive the full protections of Part 4. By this letter the CPO was permitted to have the pool invest without restriction on the amount of investment in other Rule 4.7 exempt pools operated by the CPO, based again on representations that (inasmuch as the CPO of the investor and investee pools would be the same person) the Class A, Non-QEP shareholders would continue to receive the full protections of Part 4.
12/14/1998	98-82 ; Rule 4.7;; No-Action A registered CPO was permitted to treat certain Non-QEPs as QEPs where, among other things, each of the Non-QEPs was an accredited investor and a managing director of the CPO or a director of a securities trading group of the CPO.
11/30/1998	98-81 ; Rules 4.7(a);; No-Action The Division of Trading and Markets declined to take a position regarding a request from a registered CPO ("CPO X") to treat several non-QEP investors in its pool as QEPs. The pool operated by CPO X invested in a master fund operated by a separate and unrelated CPO ("CPO Y") that had filed a Rule 4.7(a) notice of exemption on behalf of the master fund. CPO X sought relief in order that its pool could maintain its investment in the master fund operated by CPO Y. However, CPO X had not filed a notice of exemption pursuant to Rule 4.7(a) on behalf of the pool, and furthermore, the pool did not possess total assets in excess of requisite $5 million dollars as required under Rule 4.7(a)(1)(ii)(B)(2)(xi). The Division informed CPO X that it was not the appropriate person to request such an exemption in this situation since it did not operate the Rule 4.7(a) exempt pool.