CFTC Staff Letter 12-54: No-Action Relief for Sub-Adviser A from CTA Registration

U.S. COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
1155 21st Street, NW, Washington, DC 20581
Telephone: (202) 418-6700
Facsimile: (202) 418-5547 gbarnett@cftc.gov
Division of Swap Dealer and
Intermediary Oversight
Gary Barnett
Director
CFTC Letter No. 12-54
No-Action
December 12, 2012
Division of Swap Dealer and Intermediary Oversight Re: Section 4m(1) Dear [Counsel]:
This is in response to your letter to the Division of Swap Dealer and Intermediary Oversight (the “Division”) of the Commodity Futures Trading Commission (the “Commission” or “CFTC”) dated September 10, 2012, as supplemented by your e-mail messages sent October 25 and 26, and November 29, 2012 and telephone conversations with Division staff (collectively, the “Correspondence”). By the Correspondence, you request on behalf of “A”, relief from the requirement to register with the Commission as a commodity trading advisor (“CTA”) pursuant to Section 4m(1) of the Commodity Exchange Act (the “Act”). 1 Based upon the representations set forth in the Correspondence, we understand the relevant facts to be as follows. “B” is an investment adviser registered as such with the Securities and Exchange Commission (“SEC”) under the Investment Advisers Act of 1940. “B” is the adviser to more than 200 investment companies registered under the Investment Company Act of 1940. With respect to any commodity interest trading by those investment companies, “B” has claimed, and currently relies upon, the exclusion in Commission Regulation 4.5 2 from the definition of the term commodity pool operator (“CPO”). Following the Commission’s recent amendments to Regulation 4.5 that restrict the extent to which a qualifying entity may trade commodity interests, “B” has applied for CPO registration.