CFTC Staff Letter 03-04: No-Action Position on CTA and CPO Registration for Advisers of Japanese Investment Trusts

CFTC Letter 03-04
CFTC letter No. 03-04
January 14, 2003
Interpretation
Division of Clearing and Intermediary Oversight Re: Section 4m(1) – Request for CTA registration no-action position for SEC-registered investment adviser with office in the U.S. that provides services to Japanese investment trusts
Section 4m(1) – Request for CPO registration no-action position for Japanese investment adviser
operating Japanese investment trusts in which solely Japanese investors may participate Rule 4.14(a)(8) – Request for confirmation of continued eligibility of the SEC-registered investment adviser if the Japanese trusts trade commodity interests. Dear:
This is in response to your letter dated August 1, 2002, to the Division of Trading and Markets (the “Division”) of the Commodity Futures Trading Commission (the “Commission”), as supplemented by the e-mail messages of “A” of your firm dated October 4, 2002, December 4, 2002 and January 10, 2003, your e-mail message dated October 18, 2002 and by telephone conversations with Division staff. By your correspondence, you request relief on behalf of “V” and “W” in connection with advising and operating certain Japanese investment trusts (the “Japan Trusts”) sponsored by “W” and for which “X” serves as the trustee.[1] Specifically, you request that the Division confirm: (1) that it will not recommend that the Commission commence any enforcement action against “V” for failure to register as a commodity trading advisor (“CTA”) under Section 4m(1) of the Commodity Exchange Act (the “Act”);[2] (2) that it will not recommend that the Commission commence any enforcement action against “W” for failure to register as a commodity pool operator (“CPO”) under Section 4m(1) of the Act;[3] and (3) that “V” may claim the CTA registration exemption provided by Commission Rule 4.14(a)(8).[4] Based upon the representations made in your correspondence, we understand the facts to be as follows. “V” is organized under the laws of England and has its principal office in England and a branch office in the United States. It is an investment adviser registered as such with the U.S. Securities and Exchange Commission (“SEC”) under the Investment Advisers Act of 1940. “W” is an investment adviser chartered under the laws of Japan and it is registered as an investment adviser with the SEC.[5] Neither “V” nor “W” was organized outside the U.S. for the purpose of avoiding registration requirements under the Act. You represent that none of the directors or officers of “V” or, to the best of your knowledge and belief, “W”, is subject to statutory disqualification under Section 8a(2) or 8a(3) of the Act.[6] The Japan Trusts are among a number of investment trusts and funds advised by “V” in which interests are sold exclusively to Japanese investors. “W” will solicit participants in the Japan Trusts, will hire and file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/03letters/tm03-04.htm (1 of 4) [5/6/2010 5:38:22 PM]