RegAlert2000-10-17 | CFTC Staff Letter 00-99Added · Updated
CFTC Staff Letter 00-99: No-Action Position for Unregistered Co-Managing Member in Master-Feeder Structure
The Division of Trading and Markets will not recommend enforcement action against entity V for failing to register as a commodity pool operator (CPO) under Section 4m(1) of the Commodity Exchange Act, provided V acts solely as a co-managing member of four LLC Feeders. This position applies because entity X, a registered CPO, holds exclusive responsibility for all CPO functions, including investor solicitation and administrative duties, while V performs only settlement, clearing, and administrative services. The relief is contingent upon V and X acknowledging joint and several liability for Act violations, V having no involvement in commodity interest trading, and the parties maintaining their specified operational and familial relationships.
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00-99
CFTC Letter No. 00-99
October 17, 2000
No-Action
Division of Trading & Markets
Re: Section 4m of the Act: -- Request for CPO Registration No-Action Position with Respect to Co-Managing Member of a Group of Commodity Pools for which a Registered CPO is the Other Co-Managing Member Dear :
This is in response to your letter dated August 16, 2000 to the Division of Trading and Markets (the "Division") of the Commodity Futures Trading Commission (the "Commission"), as supplemented by your letter dated September 29, 2000 and by telephone conversations with Division staff. By your correspondence, you request on behalf of “V”, a Bermuda company ("V"), that the Division will not recommend that the Commission commence any enforcement action against (“V”) based solely on its failure to register under Section 4m(1) of the Commodity Exchange Act (the "Act")1 as a commodity pool operator ("CPO") in connection with “V's” activities as co-managing member of four U.S. investment funds (the "LLC Feeders"),2 whose assets will be invested in offshore commodity pools (the "Master Funds"). Based upon the representations made in your correspondence, we understand the relevant facts to be as follows. The Feeder Funds “V” is co-managing member of the LLC Feeders with “W”, which does business under the name “X”. The investors in the LLC Feeders will be exclusively U.S. persons subject to U.S. federal taxation. The LLC Feeders are each paired with offshore pool counterparts which accept only Non-U.S. persons3 and U.S. tax-exempt entities (collectively these offshore pools are referred to as the "Bermuda Feeders"). All U.S. investors in the LLC Feeders and the Bermuda Feeders will be qualified eligible persons ("QEPs") as defined in Commission Rule 4.7. The LLC Feeders and the Bermuda Feeders also will be QEPs for purposes of their investments into the Master Funds. The Master Funds file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/00letters/tm00-99.htm (1 of 5) [5/6/2010 6:22:10 PM]
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Source: Commodity Futures Trading Commission — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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CFTC published 6 documents in the last 30 days. We email you each new one the day it's published.