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
08/13/1996	96-65 ; 4.7(a), 4.7(a)(1)(ii)(B)(2)(xi);; No-Action The Division of Trading and Markets permitted the CPO of a 4.7 pool to continue to claim exemptive relief under Section 4.7 despite the participation of a non-QEP individual where the non-QEP was a medical doctor and accredited investor, had over $300,000 invested in two other investment funds managed by the pool's CTA and was fully familiar with the investment activities of the pool. In addition, the CPO of the pool, wher the pool was a QEP, was permitted to invest more than 10% of the Fund's assets in other 4.7 exempt pools, despite the non-QEP's participation.
08/12/1996	96-64 ; Rule 4.7(a);; No-Action The Division of Trading and Markets permitted a registered CPO to claim relief under Rule 4.7(a), notwithstanding the presence of non-QEPs in its pool, where the pool invests primarily in mortgage-backed securities and the non-QEPs are members of the CPO or experienced employees of a registered CTA that is owned by the persons who own the CPO. In addition, the Division granted the CPO's request to permit another non-QEP investor, the father of one of the pool's managing members, to receive an assignment of a portion of the return that the member will receive on his investment in the pool.
08/06/1996	96-62; ; Rule 4.7(a)(2)(ii);; No-Action The Division of Trading and Markets denied a registered CPO relief from the periodic reporting requirements of Rule 4.7(a) (2) (ii) , where the CPO made no representations sufficient to warrant relief from compliance with those requirements. Further, in light of the CPO's failure to comply with the annual reporting requirements of Rule 4.7(a) (2) (iii) and the filing requirements of Rule 4.7(a)(3), the Division was unable to grant any extension of time in which the CPO must distribute the statements required by Rule 4.7(a)(2)(ii). The CPO remains subject to the requirements that it: (1) prepare an d file annual reports by the previously extended deadline of May 1 of each year; and (2) prepare and distribute quarterly statements to pool participants within thirty calendar days after the end of the reporting period.
08/06/1996	96-61 ; Rule 4.7(a);; No-Action The Division of Trading and Markets permitted a registered CPO to claim relief under Rule 4.7(a), notwithstanding the presence of non-QEPs in its pool, where the non-QEPs were managing group members and key employees, all of whom are experienced professionals in the consulting business.
07/23/1996	96-59 ; Rule 4.7(a)(1)(ii)(B)(2)(xi);; No-Action The Division of Trading and Markets provided no-action relief from the ten percent restriction of Rule 4.7(a)(1)(ii)(B)(2)(xi) that would have prevented a pool, which itself qualified as a QEP but had non-QEP investors, from investing more than ten percent of its assets in a Rule 4.7- exempt pool. The same entity was CPO of both the investor and investee pool, and the investor pool remained subject to all reporting and disclosure requirements of Part 4.
07/23/1996	96-54 ; Section 2(a);; No-Action No-Action letter allowing the London Securities and Derivatives Exchange Limited's (OMLX) futures contracts based on the OMX Stock Index to be offered and sold in the United States.
07/22/1996	96-60 ; Section 4m(1) of the Commodity Exchange Act; Rule 4.5; Rule 4.14(a)(8);; No-Action The Division of Trading and Markets provided no-action relief to a registered investment adviser (IA) , and any affiliate thereof, from the CPO and CTA registration requirements of Section 4m(1) of the Commodity Exchange Act in connection with their solicitation and other activities on behalf of, and advisory services for, a Canadian-organized group trust in which all investors would be Canadian pension plans. Except in limited circumstances (i.e.r because retirees moved from Canada to the United States), the beneficiaries of the pension plans would be Canadian residents, and in no case would the number of United States residents who were beneficiaries of an investor pension plan be more than 3% of a plan's total beneficiaries. Given the foreign organization of the pension plan investors, the pension plans would not be subject to regulation under ERISA, and thereby IA as CPO and CTA to the group trust would not be eligible respectively for registration exemptions pursuant to Rule 4.5 (or Division no-action relief extending this exemption to trusts consisting entirely of U.S. pension plans subject to ERISA) and Rule 4.14(a)(8). Nevertheless, the IA affirmed that although the group trust was not eligible for treatment under Rule 4.5, the investment strategies employed on behalf of the group trust would be consistent with the requirements of Rule 4.5. The Division also provided no-action relief from the CPO registration requirements to the trustee of the group trust, which was a Canadian subsidiary of a U.S. company.
07/12/1996	96-58 ; Rule 3.34;; No-Action The Division of Trading and Markets granted a request for clarification from a firm registered as an FCM and a CTA that registered APs must satisfy ethics training requirements even though they do not conduct any futures or commodity interest business. The Division concluded that, as the APs did not attend an ethics training session that would satisfy the requirements of Rule 3.34 by April 26, 1996, they have been and continue to be in violation of Rule 3.34. Accordingly, the APs must complete their ethics training without delay and the firm is obligated to assure that they do so. The Division noted, however, that this does not absolve the APs or the firm for any past violations of the Act or Commission regulations promulgated thereunder, if the Commission determines that such action is appropriate.
07/08/1996	96-57 ; Rules 4.35(n) & 4.35(a) (7);; No-Action The Division of Trading and Markets denied a registered CTA's request to treat the performance of an account owned by the CTA's mother as though it were the performance of an ordinary client account, and not proprietary trading results within meaning of Rule 4.35(a)(7). The CTA's mother's account was the sole account traded pursuant to the trading program for which the CTA wished to present performance as part of the required performance presentation in its Disclosure Document.
07/08/1996	96-56 ; Section 4m(1) of the Act;; No-Action The Division of Trading and Markets denied a company and its owner's request for relief from CTA registration with regard to producing and distributing materials on commodity interest trading for a fee to students/subscribers as part of a course offered by the company. Although the materials include general information on trading in commodity interests and detailed information on price forecasting using technical analysis, they also provide specific advice on market conditions that signal when persons should trade in the futures markets. In addition, the materials promote the company's hotline and newsletter services as an integral part of the course. The Division concluded that the company is required to register as a CTA and its owner is required to be listed as a principal and registered as an associated person of the company.