CFTC Staff Letter 99-04: Confirmation of Continued CTA Registration Exemption Under Rule 4.14(a)(8)

99-04
CFTC Letter No. 99-04
December 31, 1998
Division of Trading & Markets
Re: Request for Confirmation of Continued Availability of the Exemption from CTA Registration in Rule 4.14(a)(8). Dear :
This is in response to your letter dated May 15, 1998, to the Division of Trading and Markets ("Division") of the Commodity Futures Trading Commission ("Commission"), as supplemented by your facsimile transmission dated June 15, 1998 and telephone conversations among you, "A" of your firm and Division staff. By your correspondence you request confirmation that the no-action position we previously have taken with respect to the need for "V" to register as a commodity trading advisor ("CTA") based solely upon its failure to meet all of the criteria for CTA exemption in Rule 4.14(a)(8)1 will continue if certain facts pursuant to which that position was issued change. The no￾action position was issued by letter dated June 5, 1995 and confirmed by letter dated July 20, 1995 (the "Prior Letters"). Based upon the representations you made to us, as supplemented by the representations made in support of the Prior Letters, we understand the facts to be as follows. "V" is registered as an investment adviser ("IA") under the Investment Advisers Act of 1940 (the "IAA"). "V" is the IA of "W", an investment company registered under the Investment Company Act of 1940. "W" has filed a Notice of Eligibility for exclusion from the definition of the term commodity pool operator ("CPO") pursuant to Rule 4.5 and "V" has filed a Notice of Exemption from commodity trading advisor ("CTA") registration pursuant to Rule 4.14(a)(8).2 "V" does not hold itself out as a CTA. Rule 4.14(a)(8) provides that a person is not required to register as a CTA if it is registered as an IA under the IAA and -- (i) The person's commodity interest trading advice:
(A) Is directed solely to, and for the sole use of, entities which are excluded from the definition of the term "pool" under §4.5 or are qualifying entities under §4.5 for which a notice of eligibility has been filed; (B) Is solely incidental to its business of providing securities advice to each file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/99letters/tm99-04.htm (1 of 4) [5/6/2010 7:12:28 PM]