CFTC Staff Letter 15-22: No-Action Position on CPO and CTA Registration for Canadian Company Using US Subsidiaries

U.S. COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
1155 21st Street, NW, Washington, DC 20581
Telephone: (202) 418-6700
Division of Swap Dealer and
Intermediary Oversight
Thomas Smith
Acting Director
CFTC Letter No. 15-22
No Action
March 31, 2015
Division of Swap Dealer and Intermediary Oversight Re: Section 4m(1) Dear :
This is in response to your letter to the Division of Swap Dealer and Intermediary Oversight (“Division”) of the Commodity Futures Trading Commission (“Commission” or “CFTC”) dated December 20, 2013, as supplemented by your letter dated March 18, 2014, your e-mail messages dated March 28, 2014 and May 23, 2014, and telephone conversations with Division staff (collectively, “Correspondence”). By the Correspondence, you request on behalf of “A”, a Canadian company (“A”), confirmation that neither “A”, any of its subsidiaries, nor any employee, officer, director or manager of “A” or its subsidiaries will be required to register as a commodity pool operator (“CPO”) or commodity trading advisor (“CTA”) under Section 4m(1) of the Commodity Exchange Act (“Act”) 1 if “A” acquires interests in certain collective investment vehicles in the United States through United States subsidiaries wholly-owned by “A” and/or its Canadian Affiliates. For purposes of this letter “Canadian Affiliates” means “A’s” shareholders (the “B” and four Canadian pension funds) and Canadian companies directly or indirectly wholly-owned by “A” and/or its shareholders. Based upon the representations made in the Correspondence, we understand the relevant facts to be as follows. “A” is a real estate subsidiary of the “B”. The “B” was formed by the Province of “C” to manage, and achieve return on capital, with respect to money deposited with it by various pension and insurance plans and by “C” government agencies, inter alia. Under “C” law, the “B” may acquire an interest in an entity that invests in real property (or that holds interests in other entities that invest in real property). The “B” owns 93 percent of “A’s” shares, and the remaining seven percent are owned by four Canadian pension funds.