CFTC Staff Letter 13-18: No-Action Relief for General Partners of Commodity Pools from CPO Registration

U.S. COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
1155 21st Street, NW, Washington, DC 20581
Telephone: (202) 418-6700
Facsimile: (202) 418-5407
Division of Swap Dealer and
Intermediary Oversight
Gary Barnett
Director
CFTC Letter No. 13-18
No-Action
March 13, 2013
Division of Swap Dealer and Intermediary Oversight Re: Section 4m(1) Request for Commodity Pool Operator Registration Relief Dear :
This is in response to your letter dated January 4, 2013, to the Division of Swap Dealer and Intermediary Oversight (the “Division”) of the Commodity Futures Trading Commission (the “Commission” or “CFTC”), as supplemented by the email message of your counsel, “A”, sent February 26, 2013 (collectively, the “correspondence”). By the correspondence, you seek relief on behalf of “B I”, the general partner of “Pool 1”, and “B II”, the general partner of “Pool 2” (together with Pool 1, the “Pools”) from the requirement to register with the Commission as a commodity pool operator (“CPO”) under Section 4m(1) of the Commodity Exchange Act (the “Act”), such that “C”, a registered CPO, may serve as the CPO of the Pools instead. Based upon the representations made in the correspondence, we understand the pertinent facts to be as follows: Each of the Pools is organized as a limited partnership. While “B I” is Pool 1’s general partner, and “B II” is Pool 2’s general partner, each of the “Bs” has delegated all of its management authority with respect to the Pools to “C”. As explained in the correspondence, this structure is intended to facilitate the favorable tax treatment of performance allocations to the “Bs”.