CFTC Staff Letter 95-45: No-Action for CPO Claiming Rule 4.7 Relief with Non-QEP Investors

COMMODITY FUTURES TRADING COMMISSION 2033 K Street, NW, Washington, DC 20581 DIVISION OF TRADING AND MARKETS (202) 254-8955 (202) 254- 8010 Facsimile November 22, 1994 Re: Request to Treat Certain Persons as QEPs under Rule 4.7 Dear This is in response to your letter dated September 23, 1994, to the Division of Trading and Markets ("Division") of the Commodity Futures Trading Commission ("Commission") , as supplement￾ed by your letter dated October 7, 1994, and telephone conversa￾tions with Division staff. By your letter you request confirmation that "A", a registered 9ommodity pool operator ("CPO"}, may claim relief under Rule 4.7~/ in connection with the operation of the "Fund", a commodity pool organized as a limited partnership, notwithstanding that two investors with interests in the Fund are not qualified eligible participants ( "QEPs") as defined in Rule 4.7(a}(1}(ii).~.! . Based upon the representations made in your letter, as sup￾plemented, we understand that the facts are as follows. The Fund was formed in 1991 as an investment vehicle for "A" and his family members. The Fund did not admit non-family members until October 1, 1993. As of July 1, 1994, the Fund had thirty partners and $32,144,442 in assets. Nine of the accounts were of family members, with total assets of $25,773,675. You represent that the Fund will not invest directly in commodity interest contracts. Rather, the Fund invests in investment partnerships and managed funds, securities and other investment vehicles, in each case managed by unrelated third parties who are either registered with the Securities and Exchange Commission ("SEC") or the Commission in the appropriate capacity or ~I Commission I (1994). rules referred to herein are found at 17 C.F.R. Ch. ~I Your letter of September 23, 1994 represented that there were four investors with interests in the Fund that were not QEPs. On October 16, 1994, you informed Division staff that two of the four investors who are themselves investment partnerships are withdraw￾ing their interests in the Fund.