CFTC Staff Letter 02-84: Exemption from Books and Records Location Requirements for CPOs and CTAs

CFTC Letter 02-84
CFTC Letter No. 02-84
July 10, 2002
Interpretation
Division of Trading and Markets
Re: Request for Exemption from Rules 4.23 and 4.33 Dear :
This is in response to your letter dated May 17, 2002, to the Division of Trading and Markets ("Division") of the Commodity Futures Trading Commission ("Commission"),[1] as supplemented by telephone conversations with Division staff. By your correspondence, you request that “X” and “Y”, both registered commodity pool operators ("CPOs") and commodity trading advisors ("CTAs"), be granted an exemption from the requirements set forth in Commission Rules 4.23 and 4.33[2] that a CPO and CTA, respectively, maintain certain books and records at its main business office and in accordance with Commission Rule 1.31. Based upon your representations, we understand the facts to be as follows. “X” and “Y” both maintain their corporate headquarters in Connecticut.[3] “Y”, a registered CPO and CTA, performs various administrative and bookkeeping services for both “X” and “Y”, including the preparation of books, records, and reports required of “X” and “Y” as CPOs and CTAs.[4] “Y's” main business office is located in New York.[5] “Y” has consented to maintain “X's” and “Y's” books and records that are required by Rules 4.23 and 4.33. Based upon the representations contained in your letter, the Division believes that granting the requested exemption would not be contrary to the public interest and the purposes of Rules 4.23 and 4.33.[6] Accordingly, by the authority delegated to it under Rule 140.93(a)(1), the Division hereby exempts “X” and “Y” from the books and records location requirements of Rules 4.23 and 4.33, such that they may maintain the books and records required under the rules at the main business office of “Z”. This relief is, however, subject to the conditions that: (1) “X” and “Y” notify the Division if the location of any of their respective books and records required by Rules 4.23 and 4.33 changes from that as represented to the Division; (2) “X” and “Y” remain responsible for ensuring that all of their respective books and records required by Rules 4.23 and 4.33 are maintained in accordance with Rule 1.31 and for assuring the availability of such records to the Commission, NFA, or any other agency authorized to review such books and records in accordance with the Commodity Exchange Act (the "Act")[7] and Commission regulations; (3) within forty-eight hours after a request by a representative of the foregoing, “X” and “Y” will obtain their respective original books and records from “Z's” office in New York and provide them for inspection at “X's” and “Y's” main business office in Connecticut; and (4) “X” and “Y” disclose in their respective CPO and CTA Disclosure Documents that all books and records required under file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/02letters/tm02-84.htm (1 of 3) [5/6/2010 5:52:39 PM]