CFTC Staff Letter 97-19: Exemption from Books and Records Location Requirements for CPO/CTA

97-19
CFTC Letter No. 97-19
March 27, 1997
Division of Trading & Markets
Re: Rules 4.23 and 4.33 -- Request for Relief from Books and Records Location Requirement Dear :
This is in response to your letter dated February 25, 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 your correspondence, you request that the Division exempt X , a registered commodity pool operator ( CPO ) and commodity trading advisor ( CTA ), from the requirements of Rules 4.23(a) and (b) and 4.33(a) and (b)1 that a CPO and CTA, respectively, maintain certain books and records at its main business office in accordance with Rule 1.31. Based upon the representations made in your correspondence, we understand the pertinent facts to be as follows. X s main business is located in New York. X anticipates receiving certain operational support from Y , including daily accounting services, trade processing and customer account reconciliation, for all pools operated and all accounts managed by X . Y s main business office is located in Illinois. X and Y are both subsidiaries of Z , a registered futures commission merchant. Y was organized as a legal entity separate from X for purposes of efficiency and convenience. X seeks relief from the location requirements of Rules 4.23 and 4.33 in order that it may maintain its books and records at the offices of Y in Illinois. In support of your request, you enclosed with your letter a letter dated March 10, 1997, from A , Vice President of Y , whereby Y states that it is aware of your exemption request and agrees to maintain the books and records required of X under the Commission s regulations. Based upon the foregoing, pursuant to the authority delegated by Rule 140.93(a)(1) and subject to the conditions specified herein, the Division hereby exempts X from the requirements of Rules 4.23(a) and (b) and 4.33(a) and (b) such that X may maintain its books and records at Y's main business office, as described above. This exemption is, however, subject to the conditions that: (1) X notify the Division if the location of any such records changes from that as represented to us; (2) X remains responsible for the maintenance of all required books and records and for assuring their availability to the file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/97letters/tm97-19.htm (1 of 2) [5/6/2010 7:35:07 PM]