CFTC Staff Letter 94-52: No-Action Relief from CPO and CTA Registration for Registered Investment Adviser Operating a Group Trust

DIVISION OF
TRADING AND MARKETS
Dear
COMMODITY FUTURES TRADING COMMISSION 2033 K Street, NW, Washington, DC 20581 (202) 254-8955 (202) 254- 8010 Facsimile June 1, 1994 Re: Relief from CPO/CTA Registration for Registered Investment Adviser Operating a Group Trust This is in response to your letter dated April 22, 1994, 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 against "X", the "Bank" or the "Trustee") or any of their affiliates, direc￾tors, officers or employees if: (1) "X" does not register as a commodity pool operator ("CPO") and commodity trading advisor ("CTA"); and (2) the Bank does not register as a CPO. Based upon the representations made in your letter, as supplemented, we understand the relevant facts to be as follows. "X", the sponsor of the Group Trust, is a Delaware corporation and is a registered investment adviser under the Investment Advisers Act of 1940 (the "IAA") .1/ The Group Trust was orga￾nized pursuant to an Agreement of Trust (the "Trust Agreement") by and between "X" as Sponsor and the Bank as Trustee dated December 1, 1993. As the Sponsor, "X" appoints investment managers ("Investment Managers") to direct the investment of the assets of the Group Trust, subject to guidelines established by and the supervision of "X". The Group Trust was formed for the collective investment of assets of·trusts that form part of pension or prof~t-sharing plans and government pension plans (the "Plans") .'J./ It is com￾posed of assets of the participating trusts, each of which is
part of a Plan and each of which is exempt under Section 501(a)
of the Internal Revenue Code of 1986, as amended (the "Code"), 1/ "X" is also the holding company for "Y", a brokerage and investment banking firm, and its affiliates. £1 The Group Trust is intended to be a tax-exempt, pooled fund arrangement as described in Internal Revenue Service ("IRS") Revenue Ruling 81-100. In this regard, the Group Trust has submitted an application to the IRS for tax exempt status.