CFTC Staff Letter 97-50: No-Action Relief for Managing General Partner of General Partnership

97-50
CFTC Letter No. 97-50
June 23, 1997
Division of Trading & Markets
Re: Request for Confirmation that General Partnership Is Not a Commodity Pool under Rule 4.10(d)(1) and Managing General Partner Is Not a Commodity Pool Operator under
Section 1a(4) of the Act
Dear :
This is in response to your letter dated April 7, 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 confirmation on behalf of the "Partnership" that it will not become a commodity pool as defined in Commission Rule 4.10(d)(1)1 upon the admission of three additional general partners to the Partnership. You also request confirmation that A , the managing general partner of the Partnership, will not become a commodity pool operator ("CPO") as defined in Section 1a(4) of the Commodity Exchange Act ("Act").2 Based upon the representations made in your letter, as supplemented, we understand the relevant facts to be as follows. The Partnership was organized as a general partnership under the laws of Y on June 30, 1993 in order to trade commodity futures contracts pursuant to the trading program of U , a registered CPO and commodity trading advisor ("CTA"). By letter dated March 11, 1994, the Division confirmed that the Partnership was not a commodity pool and that A was not a CPO.3 A and B are the sole remaining general partners of the Partnership.4 Currently, the Partnership has assets of $553,105. The Partnership now wishes to admit three new general partners ("New Partners"). Specifically, the New Partners are:
(1) C , who is a son of B and is an accredited investor and experienced options trader. C has worked for the past nine years first for V , and subsequently for Y , which acquired V. 5 (2) D , who is the younger son of B . He has worked as a clerk in the bond pit at W for the past two summers and plans to register as a floor trader. He file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/97letters/tm97-50.htm (1 of 3) [5/6/2010 7:35:02 PM]