CFTC Staff Letter 18-08: No-Action Relief from CPO and CTA Registration for Pension Plan Group Trusts

Division of Swap Dealer and Matthew B. Kulkin
Intermediary Oversight Director
U.S. COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
1155 21st Street, NW, Washington, DC 20581
Telephone: (202) 418-6700
Facsimile: (202) 418-5528 mkulkin@cftc.gov
CFTC Letter No. 18-08
No-Action
Division of Swap Dealer and Intermediary Oversight RE: No-Action Relief from Commodity Pool Operator and Commodity Trading Advisor Registration for the “A” in connection with its operation of the “B” Dear :
This is in response to your request submitted to the Division of Swap Dealer and Intermediary Oversight (“Division”) of the Commodity Futures Trading Commission (“Commission”) on November 9, 2017, (the “Correspondence”), on behalf of “A”, the sponsor and investment manager of the “B”. 1 In the Correspondence, you request that the Division not recommend that the Commission take an enforcement action, pursuant to Section 4m(1) of the Commodity Exchange Act (“CEA”),2 against “A” for failure to register with the Commission as a commodity pool operator (“CPO”) or commodity trading advisor (“CTA”), with respect to its activities operating “B”. In particular, you request relief comparable to that provided by Commission Regulations 4.5 and 4.6, notwithstanding that a pension plan group trust is not a “qualifying entity” under Regulation 4.5.3 Background “B” Structure and Operations In the Correspondence, you make the following representations: “A” is registered with the Securities and Exchange Commission (“SEC”) as an investment adviser under the Investment Advisers Act of 1940, as amended. “A” will act as the sponsor of “B”, pursuant to an Agreement of Trust (“Trust Agreement”) between “A” and “C”, a New York state-chartered bank currently anticipated as serving as “B’s” directed trustee (“Trustee”). “A” will operate “B” exclusively for the investment of assets of trusts that form part of qualified defined benefit pension plans and governmental pension plans (the “Plans”). Further, “A” intends to apply for 1 You state that “A” is not currently registered with the Commission in any capacity. 2 7 U.S.C. 6m(1). The CEA is found at 7 U.S.C. 1, et seq. The CEA and other regulatory provisions and staff letters cited herein may be accessed through the Commission’s website, http://www.cftc.gov. 3 17 CFR 4.5 and 4.6.