CFTC Staff Letter 93-91: No-Action Relief for Investment Manager and Trustee of Group Trust from CPO and CTA Registration

.·-r:, I
DIVISION OF
TRADING AND MARKETS
Dear
COMMODITY FUTURES TRADING COMMISSION 2033 K Street, NW, Washington, DC 20581 (202) 254-8955 (202) 254- 8010 Facsimile September 7, 1993 Re: Registered Investment Adviser -- Relief from CPO & CTA Reqistrction This is in response to your letter dated May 13, 1993, as supplemented by telephone conversations with Division staff, in which you request in connection with the operation of the "Group Trust" that the Division of Trading and Markets ("Division") of the Commodity Futures Trading Commission ("Commission") not recommend any enforcement action to the Commission if "X" does not register as a commodity pool operator ("CPO") and a commodity trading advisor ("CTA"). In addition, you request that the Division provide relief to "Y" (the "Bank" or the "Trustee"), if the Bank does not register as a CPO in connection with its service as trustee of the Group Trust. Based upon the representations made in your letter, as supplemented, we understand the relevant facts to be as follows. "X" is a Delaware corporation which engages in the business of an investment manager and is a registered investment adviser under the Investment Advisers Act of 1940 (the "IAA"). Additionally, "X" is the "investment manager" for the Group Trust, as that ~erm is defined in section 3(38) cf the Employee Retirement Income Securi~y Act of 1974, as amended ("ERI3A"). The Group Trust was organized pursuant to an Agreement and Declaration of Trust (the "Trust Agreement"} by and between "X" as investment manager and the Bank as Trustee dated August 19, 1992, and was formed for the collective investment of assets of "qualified" pension and profit sharing plans (the "Plans") as defined in Section 401(a) of the Internal Revenue Code of 1986, as amended.!! Under the terms of the Trust Agreement, each participating Plan is required to adopt and incorporate the Trust Agreement by refe_rence. You represent that each participating Plan is either a qualifying entity under Comreission Rule 4.5(b) !' The Group Trust has submitted an application to the Internal Revenue Service for tax exempt status.