CFTC Staff Letter 00-95: No-Action Position on CPO and CTA Registration for Foreign Investment Funds

00-95
CFTC Letter No. 00-95
October 3, 2000
No-Action
Division of Trading & Markets
Re: Section 4m(1): -- Request for CPO Registration No-Action Position
Section 4m(1): -- Request for CTA Registration No-Action Position
Dear :
This is in response to your letter to the Division of Trading and Markets (“Division”) of the Commodity Futures Trading Commission (“Commission”) dated February 9, 1999, as supplemented by your facsimile transmissions dated September 1, 1999, November 10, 1999, and January 12, 2000, and by telephone conversations with Division staff. By your correspondence, you request on behalf of the United States directors (“United States Directors”) of the “V” Fund, “W”, and “X” relief from the registration requirements of Section 4m(1) of the Commodity Exchange Act (the “Act”).1 You seek this relief to permit: (1) the United States Directors to operate the Funds without registering as commodity pool operators (“CPOs”); and (2) “W” and “X” to provide commodity interest advisory services to the “V” Fund and its underlying portfolio funds (the “Portfolio Funds”) (collectively the “Funds”) without registering as commodity trading advisors (“CTAs”) 2 Based upon the representations made in your correspondence, we understand the facts to be as follows. The “V” Fund is an investment company incorporated in “E” and regulated by “Z”. The “V” Fund encompasses twelve Portfolio Funds, each of which is a separate class of shares having distinct investment objectives and policies and consisting of a separate portfolio of assets. The Funds are not registered under the Investment Company Act of 1940 (the “’40 Act”), and, because they are organized in a foreign jurisdiction, they cannot, absent an exemption from the Securities and Exchange Commission (“SEC”), register under the ’40 Act.3 The Funds were not organized outside of the United States for the purpose of avoiding CPO registration by the United States Directors. The “V” Fund has six directors, four of whom are United States persons4 (“United States Directors”).5 The United States Directors are all affiliated with “W”, “X”, or both. None of the United States Directors is subject to a statutory disqualification under Section 8a(2) or 8a(3) of the Act.6 As operators of the Funds, the United States Directors would be required, absent relief, to register as CPOs. file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/00letters/tm00-95.htm (1 of 5) [5/6/2010 6:22:00 PM]