CFTC Staff Letter 97-56: No-Action Relief from CPO Registration for Sole General Partner of Limited Partnership

97-56
CFTC Letter No. 97-56
June 26, 1997
Division of Trading & Markets
Re: Request for Relief from CPO registration under Section 4m(1) of the Commodity Exchange Act Dear :
This is in response to your letter dated May 30, 1997 to the Division of Trading and Markets ( Division ) of the Commodity Futures Trading Commission ( Commission ) as supplemented by your letters dated June 11, 1997 and June 13, 1997 and by telephone conversations with Division staff. By your correspondence, you request on behalf of X relief from registration as a commodity pool operator ( CPO ) 1 under Section 4m(1) of the Commodity Exchange Act ( Act ) 2 in connection with serving as the sole general partner of the Partnership . Based upon the representations made in your letter, as supplemented, we understand the relevant facts to be as follows. X is owned solely by A , who also serves as X s president. Both X and A are financial consultants and advisors on corporate transactions, primarily mergers and acquisitions. Since 1980, A has been a financial consultant and advisor on corporate transactions, primarily mergers and acquisitions and venture capital financing. Prior to that time, he was a principal of a hedge fund. A formed X approximately five years ago as a vehicle through which he could conduct his financial consulting business. Neither X nor A is registered with the Commission in any capacity3 and neither is subject to a statutory disqualification under Section 8a(2) or 8a(3) of the Act.4 The Partnership, which has not begun operations, is a private limited partnership that will trade, for speculative purposes, the Standard and Poor s 500 Stock Price Index futures contract and put and call options on the Standard and Poor s 500 Stock Price Index futures contract, which are traded on the Chicago Mercantile Exchange. The Partnership will have four limited partners (the Limited Partners ): two United States ( U.S. ) persons, 5 a French company, and a family trust. The U. S. persons, the managing director of the French company, and the trustee of the family trust have all had long-standing business and/or personal relationships with A . In addition, each of the limited partners (in the case of the trust, the trustee) is a qualified eligible participant as defined in Rule 4.7(a). No advertising or general solicitation in connection with the Partnership or its organization has been or will be employed by X or A . It is intended that three Limited Partners file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/97letters/tm97-56.htm (1 of 3) [5/6/2010 7:36:34 PM]