CFTC Staff Letter 97-44: No-Action Relief from IB Registration for Company Selling Lead Database

97-44
CFTC Letter No. 97-44
June 9, 1997
Division of Trading & Markets
Re: Relief from Registration Requirement for a Company Selling a Database of Leads to Commission Registrants Dear :
This is in response to your letters dated March 14, 1997, and March 28, 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 letters, as supplemented, you request that the Division confirm that ( Company"), which sells a database of leads to Commission registrants, is not required to register with the Commission as an introducing broker ("IB").1 Based upon the representations made in your letters, as supplemented, we understand the pertinent facts to be as follows. Since 1982, the Company has been selling to Commission regis-trants a database of investors in commodity pools and hedge funds. The database contains an individual s name, address and telephone number, the commodity pool or hedge fund in which he has invested, and the amount of such investment. You represent that the names, addresses and investment information in the database were obtained from publicly available partnership filings in various county government recorder offices throughout the country. Further, your represent that the Company does not independently investigate or verify the accuracy of the investment information culled from the county records. Rather, the Company adds telephone numbers to the information from the county records through the use of a computerized telephone directory. You state, however, that due to changes in partner-ship registration and recording requirements, no new names have been added to the database since 1992. In addition, the Company does not have any contact with members of the general public nor does it advertise for new leads or purchase any additional leads from other sources. Thus, other than updating telephone numbers and addresses, the Company s database has remained static since 1992. The Company markets the database to Commission registrants through direct mail and advertisements in futures publications. Your current direct mail brochure describes the database as a list of 5,000 individuals who have invested $20,000 or more in publicly organized commodity funds and privately placed hedge funds. The Company sells the database in various computerized formats for a fixed fee of ( A ). The Company does not receive any additional compensation based file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/97letters/tm97-44.htm (1 of 4) [5/6/2010 7:34:50 PM]