CFTC Staff Letter 00-96: No-Action Position on CPO and CTA Registration for Offshore Fund Management Company and Adviser

00-96
CFTC Letter No. 00-96
October 4, 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 letter is in response to your letter dated February 11, 1999, to the Division of Trading and Markets (“Division”) of the Commodity Futures Trading Commission (“Commission”), as supplemented by your letter dated December 10, 1999, your electronic mail correspondence sent March 7, 2000 and March 17, 2000, and telephone conversations with Division staff. By your correspondence, you request relief on behalf of “Management Company” and “Adviser” from the requirement to register as a commodity pool operator (“CPO”) and commodity trading advisor (“CTA”), respectively, under Section 4m(1) of the Commodity Exchange Act (“Act”) 1 in connection with the Management Company’s operation of, and the Adviser’s provision of commodity interest trading advice to, the “Fund”. 2 Based upon the representations made in your correspondence, we understand the facts to be as follows. The Fund is organized under the laws of the Grand Duchy of Luxembourg as a mutual fund, which is referred to in Luxembourg as a fonds commun de placement, and is qualified as an Undertaking for Collective Investment in Transferable Securities. Since the Fund is organized in a foreign jurisdiction, it cannot, absent an exemption from the Securities and Exchange Commission, register as an investment company under the Investment Company Act of 1940 (“ICA”).3 Neither the Fund nor the Management Company was organized outside of the United States to avoid CPO registration requirements under the Act. The Fund is managed on a contractual basis by the Management Company for the benefit of the Fund’s shareholders pursuant to the Fund’s management regulations.4 The Management Company is incorporated under Luxembourg law as a limited liability company, which is referred to in Luxembourg as a societe anonyme, and maintains its registered office in Luxembourg. The Management Company is owned by “P”, a Delaware limited partnership, and “Q”, a Delaware corporation. “Q” is the general partner of “P”. 5 The Management Company will act principally through its custodian, “S”, its paying agent, “T”, its transfer agent, “U”, and its distributor, “V”, all of which are located in Luxembourg or Italy. The Management Company’s sole function is the management of the Fund. The Management Company is file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/00letters/tm00-96.htm (1 of 4) [5/6/2010 6:22:08 PM]