CFTC Staff Letter 01-62: No-Action Position on CPO and CTA Registration for Non-U.S. Entities Advising a Cayman Islands Pool

CFTC Letter No. 01-62
CFTC Letter No. 01-62
June 13, 2001
No-Action; Interpretation
Division of Trading and Markets
Re: Section 4m(1) – Request for CPO registration no-action position for Cayman Islands bank acting as trustee of a Cayman Islands investment trust in which solely Japanese investors may participate
Section 4m(1) – Request for CTA registration no-action position for SEC-registered
investment adviser with offices in the U.S. who provides services to the Cayman Islands investment trust Rule 4.14(a)(8) – Request for confirmation of continued eligibility of the SEC-registered investment adviser if the Cayman Islands investment trust trades commodity interests. Dear :
This is in response to your letter dated April 30, 2001, to the Division of Trading and Markets (the “Division”) of the Commodity Futures Trading Commission (the “Commission”), as supplemented by your e-mail message dated May 21, 2001 and by telephone conversations with Division staff. By your correspondence, you request relief on behalf of “X” and “Y” in connection with advising and operating “Z”, a trust established under Cayman Islands law (the “Cayman Trust”). Specifically, you request that the Division confirm: (1) that it will not recommend that the Commission commence any enforcement action against “Y” for failure to register as a commodity pool operator (“CPO”) under Section 4m(1)[1] of the Commodity Exchange Act (the “Act”);[2] (2) that it will not recommend that the Commission commence any enforcement action against “X” for failure to register as a commodity trading advisor (“CTA”) under Section 4m(1) of the Act; and (3) that “X” may claim the CTA registration exemption provided by Commission Rule 4.14(a)(8).[3] Based upon the representations made in your correspondence, we understand the facts to be as follows. “X” is organized under the laws of England and has its principal office in England and a branch office in Maryland. It is an investment adviser registered as such with the U.S. Securities and Exchange Commission (“SEC”) under the Investment Advisers Act of 1940. “Y” is a bank chartered under the laws of the Cayman Islands. None of the directors of “Y” is a U.S person.[4] Neither “X”, “Y” nor the Cayman Trust was organized outside the U.S. for the purpose of avoiding registration requirements under the Act. None of the directors or officers of “Y” or “X” is subject to a statutory disqualification under Section 8a(2) or 8(a)(3) of the Act.[5] file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/01letters/tm01-62.htm (1 of 4) [5/6/2010 6:14:26 PM]