CFTC Staff Letter 97-49: No-Action Relief for Introducing Broker Providing Agricultural Market Commentaries

97-49
CFTC Letter No. 97-49
June 20, 1997
Division of Trading & Markets
Re: Rule 4.14(a)(6): Availability of Commodity Trading Advisor Registration Exemption To an Introducing Broker Which Provides Agricultural Market Commentaries Through Various Media Dear :
This is in response to your letter dated April 17, 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 the Division's opinion as to whether the Rule 4.14(a)(6) 1 exemption from registration as a CTA would be available to X , a registered IB and CTA, so that X may withdraw its CTA registration but continue to provide commentary on cash and futures agricultural markets through various media. Based upon your letter, as supplemented, we understand the pertinent facts to be as follows. X is a registered IB currently guaranteed by W , a registered futures commission merchant ("FCM"), and has been so registered since 1987. In 1996, X also registered as a CTA since it believed such registration was necessary in order for it to provide commentary on agricultural markets through various media, as more fully described below. You are listed as the sole principal and are a registered associated person ("AP") of X . During a recent audit of X by the National Futures Association ("NFA"), NFA auditors informed you that X may be able to provide its commentary without being registered as a CTA based upon the registration exemption provided by Rule 4.14(a) (6), and the auditors instructed you to seek the Division's opinion as to whether this exemption would be available to X . X provides a commentary service on agricultural markets, called "V",twice daily over Y and Z , two media transmission services that provide subscribers access to other information services via a satellite link. The commentary may involve discussions on price movements in the cash and futures markets for agricultural products, demand and supply factors in the agricultural markets, and other factors relevant to the cash and futures agricultural markets as well as specific recommendations on marketing grain in the cash market and on positions to be taken in the futures markets for hedging purposes. "V" also runs a "tally sheet" which provides the results of entering into the hedge positions recommended by it. Persons who receive "V are charged a subscription file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/97letters/tm97-49.htm (1 of 5) [5/6/2010 7:35:03 PM]