CFTC Staff Letter 95-107: No-Action Position on Rule 4.7 Relief for Non-QEP Investors

U.S. COMMODITY FUTURES TRADING COMMISSION DIVISION OF TRADING & MARKETS Three Lafayette Centra 1155 21st Street, NW, Washington, DC 20581 Telephone: {202) 418-5430 Facsimile: {202) 418-5536 November 22, 1995 Re: Request for Relief Under Rule 4.7 Dear This is in response to your letter dated April 21, 1995, as supplemented by letters dated May 4, 1995, June 27, 1995, July 14, 1995 and September 25, 1995 and telephone conversations with Division staff, in which you request on behalf of "R", a registered commodity pool operator ("CPO") and general partner of (the "Partnership"), confirmation that "R" may claim relief under Rule 4.7~/ despite the fact that certain limited partners in the Partnership will not be qualified eligible participants ("QEPs"), as that term is defined in the rule. In addition, you request on behalf of the Partnership relief from the restriction in Rule 4.7(a) (1) (ii) (B) (2) (xi) {the "ten percent restriction") that would prevent the Partnership, as a pool with non-QEP participants, from investing more than ten percent of its assets in other pools for which the CPOS there9f have claimed relief under Rule 4.7 ("Rule 4"7 exempt pools") .'J./ (a) General Representations. Based upon the representations made in your correspondence, we understand the pertinent facts to be as follows. "R" is a closely ~/ Commission rules referred to herein are found at 17 C.F.R. Ch. I (1995), as amended by 60 Fed. Reg. 38,146 (July 25, 1995). 2./ During a telephone conversation with Division staff on November 16, 1995, you withdrew your request in connection with the following potential investors in the Partnership: "C 11 , "D 11 , "E", II F" , "G" ' "H" ' " I " and "J II , and "K II •