CFTC Staff Letter 97-88: No-Action Relief from CTA Registration for Subadvisor to Canadian Funds

97-88
CFTC Letter No. 97-88
October 10, 1997
Division of Trading & Markets
Re: Request for Relief from Registration as a Commodity Trading Advisor under § 4m(1) Dear :
This is in response to your letter dated September 9, 1997 to the Division of Trading and Markets ("the Division") of the Commodity Futures Trading Commission (the "Commission"), as supplemented by your letters dated September 26, 1997 and September 30, 1997 as well as telephone conversations with Division staff. By your correspondence, you request relief from registration as a commodity trading advisor ("CTA") under Section 4m(1) of the Commodity Exchange Act (the "Act")1 for V , a Colorado corporation, in connection with providing advisory services to W and X (the "Funds"). 2 Based upon the representations made in your correspondence, we understand the pertinent facts to be as follows. The Funds are open-end mutual fund trusts established under the laws of the Province of Ontario, Canada pursuant to a Declaration of Trust made by the Funds' trustee, Y . The investment objective of X is to seek long-term growth of capital, which is accomplished by investing primarily in stocks of major, established U.S. corporations. The investment objective of W is to seek long-term growth of capital and to generate income as a secondary objective. It seeks to achieve this objective through a diversified portfolio of securities which consists mainly of common and preferred stocks of Canadian, United States ("U.S.") and other international issuers. Interests in the Funds will not be offered, sold, or transferred to any U.S. person, as that term is defined in Rule 4.7.3 However, interests in the Funds will be offered outside of the U.S. and will be available to members of the non-U.S. public for a minimum subscription price of $500. V owns neither voting nor participatory shares in the Fund, nor will any employees of V serve as directors of the Funds. Moreover, V is not involved in marketing or soliciting participations in the Funds, nor is it involved in administrative matters or distribution of shares for the Funds. The Funds' investment adviser, the "Manager", is a Canadian corporation. V is not affiliated in any way with the Manager. V has entered into agreements as of July 31, 1997 with the Manager under which V will act as subadvisor to the Funds. The Funds may also invest in or use derivative instruments that are consistent with the investment file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/97letters/tm97-88.htm (1 of 4) [5/6/2010 7:36:25 PM]