CFTC Staff Letter 97-42: Exemption from Rule 4.31 Disclosure Document Requirement for Offshore Fund

97-42
CFTC Letter No. 97-42
May 28, 1997
Division of Trading & Markets
Re: Request for Exemption from Requirement to Deliver a Disclosure Document Pursuant to Rule 4.31 Dear :
This is in response to your letter dated April 14, 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 letter, you request on behalf of ( Company ), a registered commodity trading advisor ( CTA ), relief from the requirement of Rule 4.311 to deliver a Disclosure Document to the Fund . Based upon the representations made in your letter, as supplemented, we understand the relevant facts to be as follows. The Company anticipates entering into an agreement with the Fund pursuant to which the Company will have discretionary authority to trade commodity interests, among other things, for the Fund.2 The Fund is an open-end investment company organized as a corporation under the laws of the Cayman Islands. The Fund does not have any shareholders, officers or directors who are United States persons as that term is defined in Rule 4.7(a)(1)(ii)(C), nor does it contain any capital directly or indirectly contributed from United States ( U.S. ) sources. The Fund s sole office is located outside of the U.S. and it does not and will not conduct any meetings or administrative activities within the U.S. Commission Rule 4.31 requires generally that a CTA deliver to prospective clients a Disclosure Document that contains specified information about the CTA and its principals. Your letter recog￾nizes that, absent relief, the Company must deliver a Disclosure Document to the Fund. Based upon the representations you have made to us, and consistent with our prior practice in this area, 3 we believe that your request has merit. Accordingly, pursuant to the authority delegated by Rule 140.93(a)(1), the Division hereby exempts the Company from compliance with Rule 4.31 in connection with providing commodity interest trading advice to the Fund. This letter does not excuse the Company from compliance with any other applicable requirements contained in the Commodity Exchange Act ( Act ) 4 or the Commission s regulations promulgated file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/97letters/tm97-42.htm (1 of 2) [5/6/2010 7:34:54 PM]