CFTC Staff Letter 93-93: No-Action Relief from CPO Registration for Fund Investing in Pool with Limited Commodity Interest Trading

DIVISION OF
TRADING AND MARKETS
Dear
COMMODITY FUTURES TRADING COMMISSION
2033 K Street, NW, Washington, DC 20581
(202) 254 - 8955
(202) 254- 8010 Facsimile
August 16, 1993
Re: Request for Relief from Commodity Pool Operator Registration This is in response to your letter dated April 2, 1993, as supplemented by telephone conversations with Division staff in which, on behalf of "T", you request relief from the requirement to register as a commodity pool operator ("CPO") in connection with "T"'s operation of the Fund. Based upon the representations made in your letter, as supplemented, we understand the pertinent facts to be as follows. The Fund began trading in 1990. "T" has two general partners, ''A" and "B", who are also the only principals of "T". "A" will be registered as an associated person ("AP") of other companies in "the Group", which consists of affiliated companies engaged in the investment management business.!' You represent that nei￾ther "B" nor "A" is subject to a statutory disqualification pursuant to Sections 8a(2) or 8a(3) of the Commodity Exchange Act ("Act"), 7 u.s.c. § 8a(2) or 8a(3) (1988 & Supp. 1992). The limited partners of the Fund have consented to "T" allocating up to lOt of the fair market value of the Fund's assets to "V" provided that "T" waives its fees on the assets so allocated so that there is no layering of charges. "V" ig a newly fo~ed partnership that will trade predominant 1 y in the securities markets, attempting to achieve "yield enhanced" returns with low volatility. Altllough "V" will trade almost exclusively in the securities markets, its general partner, "General Partner", wishes to have the flexibility from to time to commit up to lOt ! 1 "A"'s registration as an AP of "W", "X", "Y" and "Z", each of which has applied for registration as a CPO and CTA, is pending. "A" will be responsible for the overall commodity interest-related activities of "T" and in particular for the allocation of the Fund's assets to "V". "B" will solicit partic- ipants for the Fund but will not otherwise be involved in any commodity interest-related activities and will not register as an AP.