CFTC Staff Letter 95-07: No-Action for Foundation as QEP under Rule 4.7

DIVISION OF
TRADING AND MARKETS
Dear
COMMODITY FUTURES TRADING COMMISSION 2033 K Street,NW, Washington, DC 20581 (202) 254-8955 (202) 254 - 8010 Facsimile December 22, 1994 Re: Rule 4.7 --Request to Treat a Foundation as a Qualified Eligible Participant This is in response to your letter dated December 6, 1994, to the Division of Trading and Markets ("Division") of the Commodity Futures Trading Commission ("Commission") . By your letter you request confirmation that "A" and "B", registered commodity pool operjtors ( "CPOs") , may continue to claim relief under Rule
4.71. in connection with the operation of (the "Partnership") in
the event that a new limited partner which is not a qualified eligible participant ("QEP"), as defined in Rule 4.7, is admitted as a limited partner of the Partnership. Based upon the representations made in your letter, we understand that the facts are as follows. The Partnership commenced operation as an investment limited partnership on January 1, 1994. Messrs. "A" and "B" are the registered CPOs and general partners of the Partnership (the "General Partners") . The Partnership is a private partnership which seeks to achieve appreciation with diversification of risk pursuant to a multi￾manager, multi -strategy investment program. As of October 31, 1994, it had net capital of approximately $254 million under management. All of its limited partners are QEPs. The General Partners filed a Notice of Claim for Exemption pursuant to Rule 4. 7 in connection with their operation of the Partnership. The "Foundation", a non-QEP proposed investor, wishes to be admitted as a limited partner of the Partnership, effective as of January 1, 1995. The Foundation is an organization described in
Section 501(c) (3) of the Internal Revenue Code. The directors of
the Foundation are "C" and "D", husband and wife, and their daughter, "E", each of whom is a QEP as defined in Rule 4.7. The Foundation does not fall within the definition of a QEP because it does not have investments of $2 million in value and its total assets are less than $5 million. 1./ Commission rules referred to herein are found at 17 c. F .R. Ch . . I (1994).