CFTC Staff Letter 00-57: Exemption for Managing Members of Law Firm Investment LLC

00-57
CFTC Letter No. 00-57
February 29, 2000
Interpretation
Division of Trading & Markets
Re: Rule 4.13(a)(1) - Request for confirmation of availability of CPO registration exemption for managing members of an LLC formed as an investment vehicle for partners and key employees of a law firm Rule 4.13(b)(2)(i)(A) and (B) - Request for exemption to permit substitute compliance with periodic reporting requirements where a pool does not directly trade commodity interests and investee vehicles do not timely provide the pool's CPO with information necessary to permit compliance with the reporting requirements applicable to CPOs claiming registration exemption under Rule 4.13(a)(1) Rule 4.7(a)(1)(ii)(B)(2)(xi) - Request for exemption from the ten percent restriction on assets committed to commodity interest trading applicable to a pool in which not all participants are QEPs. Dear :
This is in response to your letter dated December 11, 1998, to the Division of Trading and Markets (the "Division") of the Commodity Futures Trading Commission (the "Commission"), as supplemented by your letter dated February 9, 1999 and by telephone conversations with Division staff. By your correspondence, you request on behalf of your clients "X" a Delaware limited liability company (the "Fund") and "Y", a law firm organized as a Massachusetts general partnership (the "Partnership"), the following: (1) confirmation that the Managing Members of the Fund may claim exemption from registration as commodity pool operators ("CPOs") under Commission Rule 4.13(a)(1); 1 (2) exemptive relief from the requirements of Rules 4.13(b)(2)(i)(A) and 4.13(b)(2)(i)(B) permitting substitute compliance with those provisions by the Managing Members; and (3) exemptive relief permitting the CPOs of Rule 4.7(a) exempt pools to treat the Fund as a qualified eligible participant ("QEP") as defined in Rule 4.7(a), notwithstanding that not all of the Fund's participants will themselves be QEPs, such that more than ten percent of the Fund's assets may be invested in entities that trade commodity interests. file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/00letters/tm00-57.htm (1 of 5) [5/6/2010 6:20:01 PM]