CFTC Staff Letter 98-27: Exemption for CTA from Rule 4.33 Books and Records Location Requirement

98-27
CFTC Letter No. 98-27
March 24, 1998
Division of Trading & Markets
Re: Rule 4.33 Request for Relief from the Books and Records Location Requirement of Rule 4.33. Dear :
This is in response to your letter dated January 27, 1998, to the Division of Trading and Markets ("Division") of the Commodity Futures Trading Commission ("Commission"), as supplemented by your letters dated February 9, 26 and 27 and March 3, 1998 and by telephone conversations with Division staff, wherein you request that the Division exempt "X", a registered commodity trading advisor ("CTA"), from the requirement in Rule 4.331 that a CTA maintain its books and records at its main business office.2 Based upon the representations made in your correspondence, we understand the facts to be as follows. "X's" main business office is located in "A".3 However, since its inception in July of 1996, "X's" books and records have been maintained at the "B" office of its immediate parent, "Y".4 The books and records of "Y" and its nine subsidiaries, including "X", are kept in its "B" office. You assert that it is cost effective and more efficient for "X" to maintain its books and records at the same location. In support of your request, you have provided a letter dated March 3, 1998 from "Y" which states that "Y" is aware of "X's" exemption request and agrees to maintain the books and records required of "X" in accordance with the Commission's regulations. Based upon the foregoing representations and consistent with our prior practice in this area, 5 it appears that granting the relief requested would not be contrary to the public interest or to the purposes of Rule 4.33. Accordingly, by the authority delegated to it under Rule 140.93(a)(1), the Division hereby exempts "X" from the requirement of Rule
4.33 to allow "X" to maintain the books and records required thereunder at "Y's" office in
"B". This exemption is, however, subject to the conditions that: (1) "X" notify the Division if the location of any original books and records changes from that represented to us; (2) "X" remains responsible for ensuring that all books and records required by Rule
4.33 are maintained in accordance with Rule 1.31 and for assuring their availability to the
Commission, the National Futures Association, or any other agency authorized to review such books and records in accordance with Commission regulations; (3) within forty-eight hours after a request by a representative of the foregoing, "X" will obtain the original books and records from "Y's" office in "B" and provide them for inspection at "X's" main file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/98letters/tm98-27.htm (1 of 3) [5/6/2010 7:30:16 PM]