CFTC Staff Letter 93-105: Relief from Principal Disclosure Requirements for Passive CPO/CTA

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COMMODITY FUTURES TRADING COMMISSION 2033 K Street, NW, Washington, DC 20581 (202) 254- 8955 (202) 254- 8010 Facsimile DMSIONOF TRADING AND MARKETS . . __ j .j' Dear September 27, 1993 Re: Request for Relief from the Disclosures Required with Respect to Principals under Rule 4.21 This is in response to your letter dated July 13, 1993, as supplemented by telephone conversations with Division staff in which, on behalf of "X", a registered commodity pool operator ("CPO"), you request relief from certain disclosure requirements ot Rule 4.21!1 in connection with "X"'s operation of the "Pool" ,'!1 Based upon the representations made in your letter, as supplemented, we understand the pertinent facts to be as follows. The "General Partner" is the sole general partner of "X". "Y", a registered CPO and commodity trading advisor, owns one-half of the limited partnership shares of "X" strictly for passive investment purposes and, as a more than ten percent equity owner, is a principal of "X". . "A", the president, director and sole shareholder of the General Partner, developed •x••s trading approach and has had and continues to have sole responsibility for •x••s trading and operation. •y• has not been nor will it be in any way involved in the trading or other operations of •x•.11 Specifically, you ! 1 Commission rules referred to herein are found at 17 C.F.R. Ch. I (1993).
1.1 In your letter, you also advise the Division that "X" is
withdrawing the notice of claim for exemption filed pursuant to Rule 4.7 in connection with·the Pool. Our records will indicate such withdrawal as of July 14, 1993, the date of receipt of your letter. 11 You represent that "X"'s limited partnership agreement grants to the limited partners of •x• the :r:·ight to remove the General Partner in certain defined circumstances and requires the (continued ... )