CFTC Staff Letter 97-100: No-Action Position for CTA Registration Exemption for Series Trust Investment Manager

97-100
CFTC Letter No. 97-100
July 14, 1997
Division of Trading & Markets
Re: Section 4m(1) -- Request for Relief from Commodity Trading Advisor Registration Dear:
This is in response to your letters dated April 11 and May 15, 1997 to the Division of Trading and Markets ("Division") of the Commodity Futures Trading Commission ("Commission"), as supplemented by telephone conversations with Division staff. By this correspondence, you request on behalf of “X” relief from registration as a commodity trading advisor (“CTA”) under Section 4m(1) of the Commodity Exchange Act ("Act")1 in connection with “X” providing commodity interest trading advice to the “Trust”. 2 Based upon the representations made in your correspondence, we understand the pertinent facts to be as follows. The Trust is comprised of “separate and financially segregated” series trusts (each a “Series”), i.e., it is a family of unit trusts. The Trust and each Series are organized and operated pursuant to the laws of the Cayman Islands. Shares in a Series may not be offered or sold, directly or indirectly, to any United States person.3 Neither the Trust nor any Series accepts any capital contributed, directly or indirectly, from United States sources. Furthermore, you represent that all meetings and activities of the Trust’s and Series’ shareholders and officers will be conducted outside of the United States. “X”, a Delaware corporation with its principal place of business in “V”, is registered as an investment adviser pursuant to the Investment Advisers Act of 1940. “X” is the only investment manager for each Series. “X” primarily provides discretionary asset management investment advice to institutional customers worldwide, primarily managing investments in corporate debt securities rated below investment grade, as well as other debt and equity securities of emerging market countries. You state that because of the non-U.S. nature of the Trust and each of the Series, neither the Trust nor any Series is permitted to register as an investment company under the Investment Company Act of 1940. Therefore, neither the Trust nor any Series is a qualifying entity under Rule 4.5(a) and, absent relief, “X” may not claim relief from CTA registration pursuant to Rule 4.14(a)(8) in connection with its activities on behalf of the Trust and the Series. In support of your request, you represent that: (1) “X” intends to furnish commodity interest file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/97letters/tm97-100.htm (1 of 3) [5/6/2010 7:36:29 PM]