CFTC Staff Letter 97-90: No-Action Relief from Disclosure and Reporting Rules for CPO T

97-90
CFTC Letter No. 97-90
October 29, 1997
Division of Trading & Markets
Re: Request for Relief from Rules 4.21, 4.22 (a) and (b), 4.25, and 4.26.
Request to Treat Certain Investors as Qualified Eligible Participants Dear :
This is in response to your letter dated September 3, 1997 to the Division of Trading & Markets of the Commodity Futures Trading Commission ( Commission ) as supplemented by telephone conversations you had with Division staff. By your correspondence, you request relief from the requirements of Rules 4.21, 4.22(a) and (b), 4.24, 4.25, and 4.26 ( Rules ) 1 on behalf of T, a registered commodity pool operator ( CPO ) and commodity trading advisor ( CTA ), with regard to ( Insider Fund ), a commodity pool operated by T. You also request relief from the qualified eligible participant ( QEP ) criteria of Rule 4.7(a) on behalf of T with regard to ( Outsider Fund ), another commodity pool operated by T. THE INSIDER FUND Based upon your representations, we understand the relevant facts concerning the Insider Fund to be as follows. The Insider Fund began trading as of January 1, 1996. On November 4, 1996, March 24, 1997, and June 2, 1997, the Division granted T s requests for exemption from compliance with the Rules in connection with its operation of the Insider Fund.2 T now seeks further relief from the Rules to permit it to accept two additional persons as investors in the Insider Fund. You represent that each of these additional persons (the Proposed Participants ) is an employee of T s affiliate, ( T Advisors ) 3 and that each is involved in the trading or management of the Insider Fund. You further represent that each of the Proposed Participants is a sophisticated investor fully capable of evaluating the risks of an investment in the Insider Fund without the full disclosure and reporting safeguards of the Commodity Exchange Act [ Act ] 4 and the Commission s regulations. The Proposed Participants are:
(1) A, who joined T and T Advisors as risk manager in May 1997. A has worked in the securities and futures business since June 1987 when he file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/97letters/tm97-90.htm (1 of 5) [5/6/2010 7:36:27 PM]