CFTC Staff Letter 94-11 (No-Action): Part 4 Relief for CPO Subsidiary Offering Commodity Pool Participation to Employees

DIVISION OF
TRADING AND MARKETS
COMMODITY FUTURES TRADING COMMISSION 2033 K Street, NW, Washington, DC 20581 (202) 254-8955 (202) 254- 8010 Facsimile December 17, 1993 Re: Request for Relief from Rules 4.21, 4.22 and 4.23 Dear This is in response to your letters dated August 9, Septem￾ber 24, and October 28, 1993, as supplemented by telephone conversations with Division staff in which, on behalf of the Operator, a registered commodity pool operator ("CPO"), you request relief from certain requirements of Rules 4.21, 4.22 and 4.23(a) (10) and (a) (11)11 in connection with the operation of the Funds. 11-Jf Based upon the representations made in your letter, as supplemented, we understand the pertinent facts to be as follows. "A" is wholly-owned by "X". "X", together with its majority owned subsidiaries, is an internationally known business, con￾sulting and management firm which specializes in top-management problem-solving. Members of the top two levels of senior profes￾sionals of "X" ,1:.1 together with a number of senior administra￾tors ("administrative shareholders"), are "X"'s only sharehold￾ers. As of July 1, 1993, of a total 5,600 employees, 465 were shareholders .l1

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  The Funds are an additional benefit offered, pursuant to Regulation D of the Securities Act of 1933, exclusively to cer￾tain managing group members and key employees ("Eligible Employ￾ees") of "X", all of whom are experienced professionals in the consulting business or in administrative, financial, accounting, legal or operational activities related thereto. All Eligible ll Commission rules referred to herein are found at 17 C.F.R. Ch . I ( 19 9 3 ) . II The most senior professionals are called "directors" and the next most senior are called "principals". l 1 Of the 465 shareholders, 152 were directors, 281 principals and 32 administrative shareholders.