CFTC Staff Letter 95-30 (No-Action): Exemption from CPO and CTA Registration for Puerto Rico-Based Entities Operating a Local Investment Fund

COMMODITY FUTURES TRADING COMMISSION 2033 K Street, NW, Washington, DC 20581 (202) 254 - 8955 (202) 254-8010 FaLSimile DIVISION OF TRADING AND MARKETS Dear February 10, 1995 Re: Section 4m(1) -- Request for Relief from Commodity Pool Operator and Commodity Trading Advisor Registration for Certain Entities This is in response to your letter dated September 8, 1994, to the Division of Trading and Markets ("Division") of the Commodity Futures Trading Commission ("Commission") , as supplemented by letters dated October 6, 1994, November 1, 1994, December 22, 1994, January 17, 1995, and February 3, 1995 and telephone conversations with Division staff. By your letter you request that the Division grant relief from: (1) commodity pool operator ("CPO") and commodity trading advisor ("CTA") registration requirements on behalf of "T"; and (2) CTA registration requirements on behalf of "U", in connection with the operation of (the "Fund"). Based upon the representations made in your letter, as supplemented, we understand that the facts are as follows. "T" is incorpor~ted in Puerto Rico, has its principal office and place of business in Puerto Rico, and is the underwriter for the Fund. Although "T" is not registered with the Commission in any capacity, it is registered as a broker-dealer with the Securities and Exchange Commission ("SEC"). "T" is not registered as an invest￾ment adviser pursuant to an exemption provided by Section 203 (b) (3) of the Investment Advisers Act of 1940 ("IAA").1./ Puerto Rico is the principal residence of the members of the board of directors of "T" and of "T' s" principals and officers. You represent that neither "T" nor any of its principals, officers and members of its 1./ Section 203 (b) (3) of the IAA provides an exemption from registration to an investment adviser who, during the preceding twelve months, has had fewer than fifteen clients and who does not hold himself out generally to the public as an investment adviser nor act as an investment adviser to any registered investment company. An investment adviser claiming this exemption remains subject to the antifraud provisions of Section 206 of the IAA.