CFTC Staff Letter 97-25: Co-CPO Registration Relief for General Partner X

97-25
CFTC Letter No. 97-25
March 27, 1997
Division of Trading & Markets
Re: Section 4m(1) of the Act -- Request for Co-CPO Registration Relief Dear :
This is in response to your letter to the Division of Trading and Markets ( Division ) dated February 15, 1997, as supplemented by your letters dated March 5, 1997 and March 12, 1997 and telephone conversations with Division staff. By your correspondence, you request that the Division grant relief from registration as a commodity pool operator ( CPO ) under Section 4m(1) of the Commodity Exchange Act (the Act ) 1 to X in connection with its acting as a general partner of (the Fund ). Based upon the representations made in your correspondence, we understand the pertinent facts to be as follows. X is currently the sole general partner of the Fund. The Fund is operated as a fund of funds and currently trades only securities. However, the Fund intends to trade commodity interests in the near future and, prior to the Fund engaging in such trading, a claim for exemption pursuant to
Section 4.12(b) will be filed with the Commission.
A is the managing member of X and Y is a member. A is the general partner of Y and the limited partners are two trusts, one for each of his minor children. A is the trustee of both trusts. It is proposed that Z , a registered commodity pool operator ( CPO ) 2 , be added as a second general partner and Co-CPO of the Fund.3 A is registered as an associated person ( AP ) and listed as a principal of Z Inasmuch as X is, and Z would be, a general partner of the Fund, each would be serving as a CPO of the Fund and, absent relief, each must register as such. Although Z is registered as a CPO, X is not. In support of the instant request that X not be required to register as a CPO, you represent that except in the course of A s activities in his capacity as an associated person of Z , X and A will not exercise discretion, supervision or control over (i) the solicitation, acceptance or receipt of funds or property to be used for purchasing interests in the Partnership or (ii) the investment, use or disposition of funds or property of the Partnership. In light of the foregoing, the Division will not recommend that the Commission take any enforcement action under Section 4m(1) against X solely on the basis of its failure to register file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/97letters/tm97-25.htm (1 of 3) [5/6/2010 7:34:56 PM]