CFTC Staff Letter 95-63: No-Action for Registered Investment Advisor Bunching Customer and Proprietary Orders

DIVISION OF
TRADING AND MARKETS
Dear
Re:
COMMODITY FUTURES TRADING COMMISSION 2033 K Street, NW, Washington, DC 20581 (202) 254-8955 (202) 254-8010 Facsimile July 17, 1995 Allocations of "Bunched" Orders (/S-?3 This letter responds to your letter dated April 25, 1995, in which you requested confirmation from the Division of Trading and Markets ("Division") that proposed use of "bunched" orders by a registered investment advisor ("Advisor"), as described, will not violate the Commodity Exchange Act ("Act") and Commodity Futures Trading Commission ("Commission") regulations thereunder. Based upon the representations made in the letter, we understand the facts to be as described below. a registered futures commission merchant ("FCM"), has established accounts which represent retirement plans created for the ben~fit of partners and employees ("Plans") )J The Advisor has discretion over certain assets of the Plans and invests and trades the assets committed to its management through a variety of programs and strategies involving, among other instruments, equity and fixed income securities, currencies and money market instruments. In connection with these activities, the Advisor purchases and sells futures and options on futures on commodities, currencies, government securities, stock indexes and other instruments in a manner incidental to the trading of securities, for hedging and non-hedging purposes. The Advisor also invests and trades the assets of other accounts committed to its management. Although you state that the Advisor is not affiliated with , you also state that the chairman, chief executive officer and sole controlling shareholder of the Advisor was formerly a general l/ recognizes that because general partners and senior employees of ~ave interests in the Plans, the accounts of the Plans are considered proprietary accounts of under Commission Regulation 1.3(y).