CFTC Staff Letter 96-13: No-Action for Three Individuals as Qualified Eligible Participants Under Rule 4.7

U.S. COMMODITY FUTURES TRADING COMMISSION Three Lafayette Centre 1155 21st Street, NW, Washington, DC 20581 Telephone: (202) 418-5430 Facsimile: (202) 418·5536 DIVISION OF 1RADING & MARKETS Dear January 24, 1996 Re: Request to be Treated as Qualified Eligible Participants for Purposes of Rule 4.7 This is in response to your letter dated December 8, 1995, to the Division of Trading and Markets ("Division") of the Commodity Futures Trading Commission ("Commission11 ), as supple￾mented by telephone conversations with Division staff, in which you request that "A", "B" and "C" be treat~d as qualified eligi￾ble participants ("QEPs") under Rule 4.7.1./ The decision to treat "A", "B", and "C" as QEPs is necessary to allow "U" to claim relief under Rule 4.7 notwithstanding the participation of "A11 , "B" and "C" in the "Pool". Based upon the representations made in your correspondence, we understand the pertinent facts to be as follows. "U" will be the registered commodity pool operator ("CP0 11 ) of the Pool. The Pool will pursue various fixed income, arbitrage and derivative strategies through investments in emerging country debt instru￾ments and related derivatives (including commodity interest contracts) . All of the proposed investors in the Pool meet the definition of QEP with the exception o f "A", 11B", and "C". In support of your request to treat 11A", "B", and "C" as QEPs, you state that they will be registered as associated persons of "U", will be responsible for managing the pool, have extensive experi￾ence in the financial industry and have a level of financial sophistication at least as great as that of persons qualifying as QEPs under Rule 4.7. More over, you state that each is an accred￾ited investor within the meaning of Rule 501(a) unde r the Securities Act of 1933, as amended. Additionally, you state that "A", 11 B" and "C" will each consent in writing to be treated as a QEP. 1./ Commission rules referred to herein are found at 17 C.F.R. Ch. I (1995), amende d Qy 60 Fed. Reg. 38146 (July 25, 1995).