CFTC Staff Letter 94-96: No-Action Relief for Investment General Partner of Commodity Pool

DIVISION OF
TRADING AND MARKETS
COMMODITY FUTURES TRADING COMMISSION 2033 K Street, NW, Washington, DC 20581 (202) 254 - 8955 (202) 254-8010 Facsimile October 13, 1994 Re: Section 4m -- Request of Co-General Partner of a Commodity Pool for Relief from Registration as a Commodity Pool Operator ("CPO") Dear This is in response to your letter dated June 8, 1994 to the Division of Trading and Markets (the "Division") of the Commodity Futures Trading Commission (the "Commission"), as supplemented by your letter dated September 24, 1994 and by telephone conversations with Division staff, wherein you request that the Division not recommend that the Commission take any enforcement action against (the "Investment General Partner") for failure to register as a CPO in connection wifh its serving as a co-general partner of (the "Partnership") . .l Based upon the representations made ln your letter as supplemented, we understand the facts to be as follows. The Partnership was formed as a limited partnership and commenced operations in 1991. The Partnership seeks to obtain high rates of return, principally by taking long and short positions in the common stocks of small- to medium-sized companies, but also effecting "incidental" futures and options transactions. The general partners of the Partnership are the Investment General Partner and (the "Managing General Partner") . The Managing General Partner (but not the Investment General Partner) registered as a CPO and as a commodity trading advisor ("CTA") in September, 1993, having initially believed that such registration was unnecessary if commodity futures and options transactions constituted no mor~ than .l/ We believe a brief summary of relevant prior contacts between the Partnership and the Division is appropriate. By letter dated February 28, 1994, the Managing General Partner (then known as "Z") filed a claim for relief pursuant to Commission rule 4.12 (b) (17 C.F.R. Ch. 1 §4.12(b) (1994)), and submitted the Partnership's Disclosure Document for review by the Division. In a March 9, 1994 letter to "Al' the Division advised that the Investment General Partner would have to be registered as a CPO before the requested Rule 4.12(b) relief could become effective.