CFTC Staff Letter 07-01: No-Action Relief for CTA Withdrawal of Registration

U.S. COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
1155 21st Street, NW, Washington, DC 20581
Telephone: (202) 418-5430
Facsimile: (202) 418-5547 aradhakrishnan@cftc.gov Division of Clearing and Intermediary Oversight Ananda Radhakrishnan Director CFTC letter No. 07-01 February 13, 2007 No-Action Division of Clearing and Intermediary Oversight Re: Section 4m(1) -- Withdrawal of CTA Registration by Dear :
This is in response to your letter dated August 15, 2006, to the Division of Clearing and Intermediary Oversight (“Division”) of the Commodity Futures Trading Commission (“Commission”) on behalf of your client, (“Company”), as supplemented by telephonic and electronic communications with Division staff (the “correspondence”). By the correspondence, you request confirmation that the Company may withdraw its registration as a commodity trading advisor (“CTA”) under the Commodity Exchange Act (“Act”).1 Your request is based on the similarities between the Company and the energy management firms to which the Division granted CTA registration relief by Staff Letters No. 04-12 and 02-59.2 Based upon the representations made in the correspondence, we understand the relevant facts to be as follows. The Company was formed as a non-profit corporation in May of 1997 as an alliance of public power utilities, i.e., power utilities owned by political subdivisions (“customers”). Through the Company, these customers market and trade wholesale electricity and natural gas. The Company provides a number of energy management services to these customers to reduce their energy costs – i.e., energy and natural gas trading services, portfolio optimization services, financial trading and hedging services, and energy risk management services. The Company principally trades in the cash power and natural gas markets for customers. For example, the Company purchases power for a customer when the customer is short or when