CFTC Staff Letter 98-50: Exemption from Reporting Requirements for CPO X

98-50
CFTC Letter No. 98-50
June 22, 1998
Division of Trading & Markets
Re: Request for Exemption from Rules 4.7(a)(2)(ii) and (a)(2)(iii) Dear :
This is in response to your letter dated February 19, 1998 to the Division of Trading and Markets ("Division") of the Commodity Futures Trading Commission ("Commission") as supplemented by your letter dated May 7, 1998 and telephone conversations with Division staff.1 By your correspondence, you request that `X", a registered commodity pool operator ("CPO") and the CPO of the "Master Fund", be exempt from the periodic and annual reporting requirements of Rules 4.7(a)(2)(ii) and (a)(2)(iii), respectively.2 Based upon your representations, we understand the facts to be as follows. "X" operates the Master Fund, which has as its sole participants two feeder funds, ("Feeder Fund I") and ("Feeder Fund II"). "X" serves as the registered CPO of Feeder Fund I and the registered CPO of Feeder Fund II is "Y". "A", "B" and "C" are the Managing Members of both "X" and "Y". The Master Fund, Feeder Fund I and Feeder Fund II are each operated pursuant to Rule 4.7(a).3 Rules 4.7(a)(2)(ii) and (a)(2)(iii) require, respectively, that a CPO of a Rule 4.7(a) pool comply with certain periodic and annual reporting requirements as set forth in the rule. Thus, absent the exemption requested herein, "X" as the CPO of the Master Fund would:
(1) be required to provide periodic reports and an annual report to itself as the CPO of Feeder Fund I; and (2) with respect to Feeder Fund II would effectively also be required to provide periodic reports and an annual report to itself since, as stated above, the same three persons are the Managing Members of both "X" and "Y", the CPO of Feeder Fund II. Based upon the representations contained in your letter, the Division believes that granting the requested exemption would not be contrary to the public interest and the purposes of Rule 4.7(a).4 Accordingly, by the authority delegated to it under Rule 140.93(a)(1), the Division hereby exempts "X" from the periodic and annual reporting requirements of Rules 4.7(a)(2)(ii) and (a)(2)(iii), respectively, in connection with its operation of the Master Fund. The exemption granted by this letter does not excuse "X" from compliance with any other applicable requirements contained in the Commodity Exchange Act ("Act") or the file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/98letters/tm98-50.htm (1 of 2) [5/6/2010 7:32:19 PM]