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
08/17/2004	04-22 ; Rule 4.23;; No-Action The Division of Clearing and Intermediary Oversight exempted a CPO from the requirement of Rule 4.23 that the CPO maintain certain books and records at its main business address.The exemption is subject to the conditions that: (1) the CPO will notify the Division if the location of any original books and records changes; (2) the CPO remains responsible for ensuring that all books and records required by Rule 4.23 are maintained in accordance with Rule 1.31 and for assuring their availability to the Commission, NFA, or any other agency authorized to review such books and records in accordance with the Commission's regulations; (3) within 48 hours after a request by a representative of the foregoing, the CPO will obtain the original books and records and provide them for inspection at its main business address if the representative chooses to inspect them there; (4) the CPO discloses in its Disclosure Document where all books and records required by Rule 4.23 are kept; and (5) the CPO remains fully responsible for compliance with Rule 4.23, other than with respect to the rule's location requirement.
08/16/2004	04-21 ; Regulations 1.10 and 1.17;; No-Action the Joint Audit Committee requested that DCIO take a temporary no-action position with respect to the reclassification of mandatorily redeemable equity of non-public futures commission merchants as debt under Statement of Financial Accounting Standard No. 150 (FSA 150), as the same had been taken by the SEC with respect to non-public broker dealers. Based on an analysis that non-public futures commission merchants may be similarly affected by FAS 150, the Division issued a no-action position for the year commencing December 15, 2003, in order to provide such futures commission merchants additional time to restructure any such interests desired on order to avoid the reclassification for net capital and debt-equity ratios.
07/26/2004	04-36 ; Sections 4a, 4c(b), 4g, and 4i of the Act; part 15 and parts 17 to 19 of the Commission's Regulations;; No-Action The no-action relief permits compliance with an alternate reporting level for low notional value HedgeStreet contracts.
07/12/2004	04-20 ; Section 4m(1) - Requirement to register as a CPO;; No-Action The Division of Clearing and Intermediary Oversight took a no-action position with respect to the failure of a co-general partner of several commodity pools (the "Funds") to register as a CPO. Consistent with prior no-action letters, the other co-general partner was a registered CPO, and the unregistered co-general partner would not participate in: (1) solicitation, acceptance or receipt of funds or property to be used for purchasing interests in the Funds; or (2) the investment, use or disposition of funds or property of the Funds. Neither co-general partner nor any principal thereof was subject to statutory disqualification, and each co-general partner cross-acknowledged in writing joint and several liability for any violation of the CEAct or CFTC rules by the other co-general partner.
07/12/2004	04-19 ; Rule 1.31 - Maintaining required records;; No-Action The Division of Clearing and Intermediary Oversight issued an interpretation that a registered FCM could retain daily and monthly trader statements and reports in Adobe PDF format, without being required to retain a third-party technical consultant under the following circumstances: (i) each record must be stored on the CD or DVD in format "filename.pdf" where "filename" represents the actual name given to the sorted record; (ii) the date and type of record must be easily discernible, whether from the file name, from an index or otherwise, and the information must be updated at least daily; and (iii) each record must be maintained in a consistent format in terms of size, font, and orientation on the page.
07/08/2004	04-18 ; Rules 1.35(a-1)(5); 4.14(a);; No-Action The Division of Clearing and Intermediary Oversight (DCIO) has issued an interpretation that an associated person (AP) of an introducing broker (IB) may allocate bunched orders on a post-trade basis in accordance with Commission rule 1.35(a-1)(5). Generally, APs are not deemed "eligible account managers" under that rule. However, where the AP in question is operating as a commodity trading advisor (CTA) that is exempt from registration under Commission rule 4.14(a)(5) and (a)(10) (a person exempt from registration as a commodity pool operator (CPO) who solely advises pools for which the person is exempt from CPO registration, and a person who advises no more than 15 persons during the preceding 12 months and does not hold himself out generally to the public as a CTA, respectively), the fact that the person is also registered as an AP does not disqualify him from acting as an eligible account manager permitted to allocate bunched orders on a post-traded basis in accordance with Commission rule 1.35(a-1)(5).
06/02/2004	04-16 ; Section 2(a);; No-Action No-Action request to permit the offer and sale in the United States of futures contracts on the Taiwan Stock Exchange Capitalization Weighted Stock Index traded on the Taiwan Futures Exchange.
05/25/2004	04-17 ; Rules 4.13(a)(4) and 4.7(a)(2)(viii)(A)(5);; No-Action The Division of Clearing and Intermediary Oversight denied a request by a CPO to treat the mother-in-law of one of the CPO's principals as a QEP for the purpose of continuing to operate a pool pursuant to the CPO registration exemption to Rule 4.13(a)(4). The purpose of the CPO registration exemption of Rule 4.13(a)(4), a natural person QEP, as defined by Rule 4.7(a)(2)(viii)(A)(5), includes the spouse, child, sibling, or parent of a principal of a CPO, but does not include the principal's parent-in-law. Relief is denied in part because the CPO was unable, as a predicate of relief under Rule 4.13(a)(4), to treat the mother-in-law similarly to certain non-QEP family members of the sole shareholder of a CPO's general partner, that the Division had previously allowed to be treated as QEPs for the purpose of granting relief under Rule. 4.7. Such treatment would have included, with respect to the mother-in-law's investment, waiving any fees, waiving any applicable minimum investment requirement, waiving or relaxing any restrictions on the right to redeem, and providing the reports required by Rule 4.22.
04/15/2004	04-13 ; Rule 4.13(a)(3);; No-Action The Division of Clearing and Intermediary Oversight issued an interpretation permitting CPOs who claim registration exemption under Rule 4.13(a)(3) to offer and sell pool participants to Non-United States persons, as defined in Commission Rule 4.7(a)(1)(iv), regardless of whether such persons meet any of the sophistication criteria of Rule 4.13(a)(3)(iii). The Division noted that a Non-United States person may participate in pools operated by CPOs claiming exemption under Rule 4.13(a)(4), which imposes no trading restrictions on the pool, regardless of the person's income, net worth, or other indicia of financial sophistication.
04/13/2004	04-14 ; Section 4d of the CEAct;; No-Action In CFTC Letter No. 04-09, the Division of Clearing and Intermediary Oversight granted no-action relief to permit a firm exempt from registration as a futures commission merchant (FCM) pursuant to rule 30.10 (rule 30.10 Firm) to act as an introducing broker (IB) so as to introduce institutional U.S. customers to any FCM, including an affiliated FCM (US FCM), for purposes of trading US exchange-traded futures and options. Today, the Division issued a letter granting similar no-action relief to a second rule 30.10 firm that also is affiliated with a US FCM. The relief granted today was predicated upon conditions corresponding to those in CFTC Letter No. 04-09 that included, among others, an acknowledgement by the US FCM that it will be jointly and severally liable for any violations of the Act or the Commission's rules committed by the rule 30.10 firm in connection with the latter's handling of orders for US Customers for trading of futures and options on US exchanges, including those orders executed by the rule 30.10 firm and given up to another FCM.