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
05/15/1996	96-41; ; Section 1a(11);; No-Action Other Written Communication: Statement of Policy of and Statement of Guidance - Statement of Policy of the Division of Economic Analysis to provide certainty that in light of current market conditions, cash payments may be used, in whole or in part, to unwind work-out or restructure "Hedge-to-Arrive" contracts existing as of May 15, 1996, where the parties mutually agree to do so through a separately negotiated settlement entered into subsequent to entry into the original contract. The Division also is issuing a separate Statement of Guidance regarding the risk implications of particular features of, and practices related to, these contracts for the delivery of grain.
05/14/1996	96-43 ; Act 4k(3) and 4m(1); Rules 4.14(a)(4) and 4.14(a)(8);; No-Action The Division of Trading and Markets took a "no-action" position relieving a registered CPO and investment adviser from CTA registration while providing commodity interest trading advise to: (1) a registered investment company for which a claim of exemption had been filed under Rule 4.5; (2) an ERISA group trust with respect to which relief similar to that provided by Rule 4.5 had been granted by the Division; (3) seven QECs with respect to which the CPO had asserted exemption from CTA registration pursuant to Section 4m(1); and four pools with respect to which the CPO had asserted exemption from CTA registration pursuant to Rule 4.1(a) (4). The no-action position was conditioned upon conditioned upon continued CPO registration by the CPO, compliance with the recordkeeping requirements of Rule 4.7(b)(2)(ii) with respect to the QECs, and AP registration of each person soliciting (or supervising solicitation) of participants for pools. CPO personnel would be required to register as APs of the CPO in its capacity as a CTA.
05/14/1996	96-42 ; Section 2(a);; No-Action No-Action letter allowing the Financiele Terminjnmarkt Amsterdam N.V. (FTA) futures contract based on the Eurotop 100 Index to be offered or sold in the United States.
05/08/1996	96-45; ; Sections 1a(14), 4d and 4k(1) of the Act;; No-Action The Division of Trading and Markets expressed the view that a proposed company which would generate lists of potential commodity futures and options customers and sell such lists to Commission registrants, including futures commission merchants and introducing brokers, would be required to register under the Commodity Exchange Act. In the letter, the Division discussed its previous determinations in this area and concluded, based upon the very cursory information provided by the proposed company, that the company would be required to register as an introducing broker, and that certain persons involved with the company's operations would be required to register as associated persons.
05/07/1996	96-37 ; Rule 4.13(a)(1);; No-Action The Division of Trading and Markets granted a limited liability company' (Newco's) managers relief from CPO registration, where a corporation proposed to form Newco and transfer certain of its existing investments to Newco for business and tax restructuring reasons. Without otherwise taking any position on the legality of the transfer of investments, the Division granted relief based upon the manager's familial and long-standing business relationships with Newco's member. The relief is subject to the condition that the managers comply with the provisions of Rule 4.13(b) through (d).
05/06/1996	96-40 ; Rule 3.10;; No-Action The Division of Trading and Markets declined to provide the requested relief to a farmers' cooperative that was also a registered IB which would have allowed members of the cooperative's board of directors to not be listed as principals of the registered entity. The Division stated that the directors of a registered entity are clearly within the definition of principals contained in the Commission rules and therefore must be listed as such and file a Form 8-R and fingerprint card pursuant to Rule 3.10. The Division pointed out, however, that if the cooperative's IB services were provided by a separate entity wholly owned by the cooperative, Rule 3.10 would not require any director who had less than a ten percent ownership interest in the cooperative to file a Form 8-R and fingerprint card, provided that the director had no role in the activities of the registered entity.
05/06/1996	96-39 ; Section 4d of the Commodity Exchange Act;; No-Action The Division of Trading and Markets provided no action relief to a company so that it did not have to maintain its registration as an IB but could continue to collect "finder's fees" from registered CTAs for accounts that the company had directed to these former CTA-clients. The company withdrew its registration after its sole principal and owner became an employee and registered AP of a client CTA. Since the principal's new employer did not want the company, making it no longer economical for the company to continue its operations. With the departure of its sole principal, the company's only business activity was collecting fees already owed it. Moreover, the company had no follow-up contact with customers for whose accounts the fees were paid, and the company agreed to cease collecting all such fees whose accounts the fees were paid, and the company agreed to cease collecting all such fees within two years of the date of the Division's relief letter. The relief was conditioned on the company's former principal remaining registered with the Commission in some capacity.
05/06/1996	96-38 ; Section 4m(1) of the Act;; No-Action The Division of Trading and Markets granted a foreign corporation (X) relief from the CTA registration with respect to an offshore commodity pool, where the corporation licensed a commodity interest trading program to a foreign entity registered as a CTA (Y) that serves as the pool's CTA and who registered AP is a majority shareholder and officer of X. The relief is subject to the conditions that: (1) X will not license, sell or market the program to any person or entity who either directly or indirectly proves commodity interest trading advice to any United States person; (2) Y will not use the program to advice any United States person, except for the three United States persons who currently are investors int he pool; (3) X will not hold itself out as CTA; (4) X will submit to such special calls as the Division may make of it to show compliance with the terms and conditions of this letter; (5) the pool may not solicit or accept any additional United States persons as investors without X first becoming registered as a CTA; and (6) within thirty days of the date of this letter, Y and the pool's registered CPO provide the Division with signed and dated acknowledgments whereby each accepts joint and several liability for any violation of the Act or the Commission's regulations thereunder involving or resulting from X's activities in connection with the program.
05/02/1996	96-52 ; Section 4m(1); Rule 4.7(a)(2)(iv);; No-Action The Division of Trading and Markets granted relief from registration to a commodity pool operator (CPO), who will act solely as the "administrative manager" of the Funds. This relief was based upon the conditions that: (1) the registered commodity trading advisor (CTA) of the Funds, who will be acting as the CPO, register as such; (2) the "administrative manager" will not take any part in the solicitation, acceptance or receipt of funds or property from investors to be used for purchasing interests in the Funds, or the investment, use or other disposition of funds or property of the Funds; (3) the CPO/CTA and the "administrative manger" provide a signed and dated acknowledgment wherein each accepts joint and several liability with each other for violations of the Commodity Exchange Act or any regulations thereunder; and (4) any person who acts as an AP of the CPO must be registered as such. Further, the "administrative manger" and the CPO/CTA of the Funds are both wholly-owned by the same parent corporation. In addition, the Division exempted the CPO/CTA from the requirements of Rule 4.7 (a) (2) (iv) to maintain original books and records prepared in connection with its CPO activities in its U.S. office based upon the conditions that: (1) it maintains duplicates of such books and records in its U.S. office; (2) the original books and records are being kept offshore to comply with Internal Revenue Service requirements for relief form U.S. taxation; and (3) the original books and records will be provided to the Commission upon request.
05/02/1996	96-36 ; Rule 4.7 - Request to treat pool participants as QEPs.;; No-Action The Division of Trading and Markets gave "no-action" relief permitting a registered CPO to treat as QEPs certain individuals employed by the CPO or its affiliates for at least five years in operational or management positions (and the wife of one such employee), and to convert such individuals' Class A units in the CPO's pool to Class B units. (The CPO had previously been granted relief by the Division permitting an exemption claim under Rule 4.7 wit respect to the Class B units of the pool, on the condition that Class B units be sold only to QEPs.) The Division's no-action position also permitted the CPO to add a third class of units.