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
02/29/1996	96-28 ; CEA section 5;; No-Action The Division of Trading and Markets issued a no-action letter authorizing the Deutsche Teminborse (DTB) to install and utilize DTB computer terminals in the United States in connection with the purchase and sale of certain futures and options contracts. The relief is limited to placement of proprietary trades on behalf of DTB members, and, in the case of any DTB member who becomes a registered FCM, on behalf of foreign futures and options customers as well. In granting the relief, the Division took into consideration various factors, including the fact that the DTB is subject to oversight by German regulatory agencies, and the existence of information sharing agreements between the regulatory agencies of Germany and the United States. Moreover, the Division's authorization is subject to numerous conditions, including provisions that permit the CFTC and NFA to obtain prompt access to the books and records of DTB members with terminals in the United States, and a requirement that DTB members taking advantage of the Division's authorization identify themselves to the CFTC and the NFA.
02/29/1996	96-21 ; Rule 1.10(d)(4);; No-Action The Division of Trading and Markets has issued a no-action letter to the Chicago Board of Trade concerning the attestation of financial reports where a futures commission merchant (FCM) is organized as a partnership. Commission Rule 1.10(d)(4) provides that if an FCM is organized as a partnership, a general partner must sign the required attestation on Form 1-FR. However, the Division indicated in its letter to CBT that it would not recommend that the Commission take enforcement action under Rule 1.10(d)(4) against an FCM organized as a partnership that has only a corporation or a limited liability company as a general partner based solely upon such FCM's chief financial officer (or the individual who has these responsibilities) signing the attestation on Form 1 -FR. The Division further stated in its letter that in the case of an FCM with another partnership as its general partner, the general partner of such other partnership must sign the attestation required by Rule 1.10(d)(4). The Division also advised CBT that it could interpret its own rule concerning attestation of financial reports in a manner similar to that outlined in the Division's letter.
02/28/1996	96-18 ; Rule 1.33(b);; No-Action The Division of Trading and Markets has permitted an FCM to fulfill its obligations under Rule 1.33(b) by sending daily confirmation statements via facsimile to institutional customers who have facsimile machines, without mailing such statement in hard copy form. The no-action relief was conditioned upon several factors: (1) the FCM's current clients receiving daily confirmation statement solely by facsimile transmission must continue to meet the criteria for "institutional customers" established by the Federal Reserve Board; (2) the FCM's current clients and any future clients meeting the criteria in the institutional customer definition and wishing to avail themselves of the relief must provide written revocable consent to the FCM via hard copy agreement, to receive delivery of daily confirmation statements solely by facsimile transmission; (3) the FCM must continue to furnish monthly account statements in hard copy form; and (4) the FCM must maintain the confirmation statements in accordance with the standards set forth in Commission Rule 1.31.
02/27/1996	96-20 ; Rule 4.7(a);; No-Action The Division of Trading and Markets provided no-action relief to a CPO of a fund such that it could claim relief under Rule 4.7(a) even though some of the investors in the fund were not qualified eligible participants (QEPs) as defined in the rule. All of the non-QEP investors were professional-level employees or officers of the CPO or certain affiliated companies, and all of them had access to information on the fund and its investments. In addition, the Division granted no-action relief so that the fund could invest more than ten percent of its assets in other Rule 4.7-exempt pools despite the presence of the non-QEP investors.
02/22/1996	96-19 ; Rule 4.7(a);; No-Action The Division of Trading and Markets permitted registered CPOs to claim relief under Rule 4.7(a), notwithstanding the presence of non-QEPs in their pool, where the non-QEPs posses either futures experience and familiarity with the fund's management and operations, or have close family relationships with a person who is the sole proprietor of one of the fund's general partners and a principal of the fund's other general partner.
02/20/1996	96-27 ; Section 4m(1): Request for Relief from CPO Registration Requirements;; No-Action General partners of an investment vehicle (the "Fund") were not required to register as CPOs where, among other facts: (1) the Fund was formed by converting the structure of an existing general partnership into a limited partnership for the purpose of allowing the traders and senior personnel an opportunity to participate in the profits and limit their potential liability; (2) there are only six investors; all of whom are traders or senior personnel of the Fund; and (3) the aggregate initial margin and premiums for regulated futures contracts that will be traded by the Fund will not exceed five percent of the fair market of the Fund's total assets.
02/14/1996	96-26 ; Section 4m(1);; No-Action The corporate general partner of an investment limited partnership (the "Fund") was not required to register as a commodity pool operator where, among other things: (1) the Fund is an investment vehicle whose primary business is other than the trading of commodity interests; (2) each investor is a QEP and a close personal friend or business associate of the Fund's organizer; and (3) the Fund will trade commodity interests solely for bona fide hedging purposes and will not commit more than five percent of its net assets to establish commodity interest positions. In addition, an affiliate of the general partner which would be providing commodity interest trading advice to the Fund was not required to register as a commodity trading adviser where the affiliate is registered with the SEC as an investment adviser and does not otherwise provide commodity interest trading advice to others or hold itself out to the public as a CTA.
02/09/1996	96-25; ; Rule 4.7(a)(2)(iii);; No-Action The Division of Trading and Markets granted a registered CPO a forty-five day extension in which to comply with the annual report requirement of Rule 4.7(a)(2)(iii) where, among other things: (1) the Rule 4.7 pool was a "fund of funds" and principally is a securities fund; (2) investors would receive quarterly reports in a timely manner; and (3) investors would receive certified annual reports at least three months prior to the date on which a redemption notice is due.
02/09/1996	96-17; ; Section 4m(1), Rule 4.14;; No-Action The Division of Trading and Markets provided guidance to a registered FCM concerning whether its business dealings with and purchase of a trading system from a unregistered CTA required it, its APs or an IB guaranteed by it (IBG) to register as CTAs. The Division stated that to the extent to the FCM, its APs or the IBG used information generated by the trading system to discuss or encourage trades by clients or potential clients, these persons would fit within the statutory definition of CTA. Registration as a CTA would therefore be required unless an exclusion or exemption from the CTA registration requirements were available to them under the Commodity Exchange Act or Commission rules.
02/06/1996	96-15; ; Rule 4.7(a)(2)iv);; No-Action The Division of Trading and Markets granted a registered CPO an exemption from Rule 4.7(a)(2)(iv) with respect to the CPO's responsibility to maintain original books and records at his main business office in connection with the operation of an offshore commodity pool, subject to the condition that, within 72 hours after a request by a duly qualified representative of the Commission, originals of the Fund's books and records will be made available to the Commission at a place locate din the United States as specified by the Commission representative.