CFTC Staff Letter 00-98: Family Limited Partnerships Not Commodity Pools or CPOs

00-98
CFTC Letter No. 00-98
May 22, 2000
Interpretation
Division of Trading & Markets
Re: Rule 4.10(d)(1): -- Request for Interpretation that Family Limited Partnerships are not Commodity Pools

Section 4m(1) of the Act: -- Request for Interpretation that General Partners
of Family Limited Partnerships are not CPOs or CTAs Dear :
This is in response to your letter dated November 30, 1999 to the Division of Trading and Markets (“Division”) of the Commodity Futures Trading Commission (“Commission”), as supplemented by your electronic mail message dated February 7, 2000 and letters dated March 20, 2000 and April 4, 2000. By your correspondence, you request confirmation of your views that: (1) “N”, “O”, “P”, “Q”, “R” and “S” (collectively, the “Partnerships”) are not commodity “pools” within the meaning and intent of Rule 4.10(d)(1);1 and (2) each of “T”, “W”, “U”, and “V” as a general partner of one or more of the Partnerships (collectively, the “General Partners”), is not required to register as a commodity pool operator (“CPO”) or a commodity trading advisor (“CTA”) under Section 4m(1) of the Commodity Exchange Act (“Act”), 2 respectively, as a result of their operating and advising the Partnerships. Facts Based upon the representations made in your correspondence, we understand the facts to be as follows:
“N”
“N” is a family limited partnership whose general partners are “T” and a limited liability company, “W”, 3 which is owned by “T”, his wife, and trusts for the benefit of “T’s” children. The limited partners of “N” are four trusts for the various benefit of “T’s” children, the issue of “T’s” children, “T’s” mother and his sister. Thus, “N” is a private investment vehicle solely for “T’s” family. “T”, as the sole managing partner of “N”, will have the authority to make all investment decisions for “N”. “N” currently reimburses “T” and “W” solely for expenses incurred with respect to its operations. However, file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/00letters/tm00-98.htm (1 of 6) [5/6/2010 6:22:10 PM]