CFTC Staff Letter 95-98: No-Action Relief from CPO and CTA Registration for Common Members of a Guaranteed Investment Contract Issuer

U.S. COMMODITY FUTURES TRADING COMMISSION Three Lafayette Centre 1155 21st Street, NW, Washington, DC Telephone: (202} 418-5430 Facsimile: (202} 418 :::536 20581 DIVISION OF TRADING & MARKETS Dear November 15, 1995 Re: Section 4m(1) -- Request for Relief from Commodity Pool Operator and Commodity Trading Advisor Registration This is in response to your letter dated July 6, 1995, to the Division of Trading and Markets ("Division") of the Commodity Futures Trading Commission ("Commission") , as supplemented by letters dated July 21, 1995, August 3, 1995, August 15, 1995, August 22, 1995, and October 11, 1995, and telephone conversations with Division staff. By your July 6, 1995 letter, as supplemented, you request on behalf of your client, "Q", that the Division grant "R", "S", and "T" relief from the commodity pool operator ("CPO") registration requireme~t of Section 4(m) (1) of the Commodity Exchange Act ("Act").ll in connection with certain commodity interest trading activities in which "Q" intends to engage, as described more fully below. You also request that the Division grant "R" and "S" relief from the commodity trading advisor ("C'J;'A") registration requirement of Section 4(m) (1) of the Act2 1 in connection with providing commodity trading advice to "Q". Initially, the Division notes that "Q" is structured as a special purpose limited liability company organized under the laws of the State. As structured, three entities hold "common member￾ship interests" in "Q": "R", "S" and "T" (collectively the "Common Members" and individually a "Common Member"), each of whom has made capital contributions to "Q". Under the provisions of the "Operating Agreement" dated April 4, 1995, among "R", "S" and "T", "R" is designated as the "Controlling Common Member" and "Manager" and "S" and "T" are designated as the "Non-Controlling Common Members." From the facts as represented, it appears that all three entities may be analogous to general partners of a limited partnership and, as such, would be required to register as CPOs .l/ 2_/ 7 U.S.C. § 6m(1) (1994). Id.