CFTC Staff Letter 02-87: No-Action Position on CPO Registration for General Partner of Offshore Pool

CFTC Letter 02-87
CFTC Letter No. 02-87
July 1, 2002
Interpretation
Division of Trading and Markets
Re: Section 4m(1) of the Act: Request for CPO Registration No-Action Position Dear :
This is in response to your letter dated June 20, 2002 to the Division of Trading and Markets (the "Division")[1] of the Commodity Futures Trading Commission (the "Commission"), as supplemented by your electronic mail messages dated June 27, 2002 and June 28, 2002 and by telephone conversations with Division staff. By your correspondence, you request on behalf of “X”, a Delaware limited liability company (the “Investment Manager”), assurance that the Division will not recommend that the Commission commence any enforcement action against “Y”, a Cayman Islands exempted company (the “General Partner”), if the General Partner fails to register under Section 4m(1) of the Commodity Exchange Act (the “Act”) [2] as a commodity pool operator (“CPO”) in connection with acting as the general partner of “Z”, a Cayman Islands exempted limited partnership (the “Pool”). Based upon the representations made in your correspondence, we understand the relevant facts to be as follows. The Pool and its General Partner The Investment Manager formed the Pool on June 13, 2002 to function as the “master fund” within a master fund/feeder fund complex.[3] The Investment Manager formed the General Partner solely to comply with a requirement of Cayman Islands law that a Cayman Islands limited partnership have a Cayman Islands entity serving as a general partner. The Investment Manager is the sole shareholder of the General Partner. The General Partner has delegated all authority to make investment decisions for the Pool to the Investment Manager, and the General Partner will not be involved in either the solicitation of funds for, or investment decisions of, the Pool or any other commodity pool. Role and Responsibility of the Investment Manager The Investment Manager has applied for registration as a CPO. You represent that the Investment Manager will make all investment decisions with respect to the Pool and will undertake all CPO responsibilities, including the performance of all activities subject to regulation by the Commission. Each of the Investment Manager and the General Partner has executed and provided to Division staff a written cross-acknowledgment of joint and several liability with the other for any violation by the other of the Act or Commission rules in connection with performance of CPO functions and responsibilities file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/02letters/tm02-87.htm (1 of 3) [5/6/2010 5:52:38 PM]