CFTC Staff Letter 95-108: No-Action for Certain Fund Directors Not Registering as CPOs

U.S. COMMODITY FUTURES TRADING COMMISSION
DIVISION OF
TRADING & MARKETS
Three Lafayette Centre
1155 21st Street, NW, Washington, DC 20581
Telephone: (202) 418-5430
Facsimile: (202) 41 q-5536
November 27, 1995
Re: Request for Relief from CPO Registration
Dear
This is in response to the letter of "X" dated June 13, 1995, as supplemented by letters dated June 23, July 14, August 28, August 31 and October 26, 1995 and telephone conversations with Division staff. By its correspondence, "X" requests that the Division of Trading and Markets ("Division") not recommend that the Commodity Futures Trading Commission ( "Commission 11 ) commence any enforcement action against (the "0perator 11 ), (the "Fund") or any persons serving on the Fund's board of directors if under the circumstances set forth below none of the directors except the Operator registers as a commodity pool operator ("CPO") in connection with the operation of the Fund. Based upon the representations made in "X's" correspondence, as supplemented, we understand the relevant facts to be as follows. The Fund will invest and trade in a variety of finan￾cial instruments, including commodity futures contracts and options thereon. The Operator will serve as the investment advisor to and as a director of the Fund. The minimum investment required of each investor in the Fund is $10 million, although the Fund will have the discretion to accept investments of less than this amount. You anticipate that the Fund's Board of Directors will be comprised of the Operator and six other Directors (the "Other Directors"), each of whom will be elected at the behest of the Operator by a Cayman Islands lawyer who will be retained to represent the Fund and who will serve as the initial subscriber of shares in the Fund. You anticipate that two of the Other Directors will be "A", an Assistant Professor of Economics at University, and "B", a Professor of Mathematics and Computer