CFTC Staff Letter 99-65: Exemption from Rule 4.23 Books and Records Location Requirement for CPO Applicant X

99-65
CFTC Letter No. 99-65
December 14, 1999
Exemption
Division of Trading & Markets
Re: Request for Relief from Books and Records Location Requirement of Rule 4.23 Dear :
This is in response to your letter dated September 29, 1999 to the Division of Trading and Markets ("Division") of the Commodity Futures Trading Commission ("Commission"), as supplemented by a facsimile transmission dated December 1, 1999 and telephone conversations with Division staff. By your correspondence, you request that the Division exempt "X", an applicant for registration as a commodity pool operator ("CPO"), from the requirement of Rule 4.23 that a registered CPO must maintain certain books and records at its main business office in accordance with Rule 1.31.1 Based upon the representations made in your correspondence, we understand the facts to be as follows. "X" operates a fund that currently trades securities. After the firm's registration as a CPO becomes effective, the fund also will trade commodity interests. While "X's" main business office is located in "Y",2 the books and records that will be required by Rules 4.23(a)(3), (4), (5) and (b)(3) (the "Records") will be generated at "X's" branch office in "Z",3 where certain administrative and accounting functions are performed. You request that "X" be exempted from the location requirement of Rule 4.23, so that it may maintain the Records at its branch office in "Z". In support of your request, you represent that "X" will disclose in its Disclosure Documents the location of all books and records required to be kept by Rule 4.23. Based upon the foregoing, it appears that granting your request would not be contrary to the public interest or the purposes of Rule 4.23. Accordingly, by the authority delegated under Rule 140.93(a)(1), the Division exempts "X" from the requirements of Rule 4.23 so that "X" may maintain the Records at its "Z" branch office, as described above. This exemption is, however, subject to the conditions that: (1) "X" will 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
4.23 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 the Commission's regulations;4 and (3) within 48 hours after a request by a representative of the foregoing, "X" will obtain the original books and records from the "Z" branch file:///S|/Website%20Management/LegacyDataCopyasof2010-04-21/tm/letters/99letters/tm99-65.htm (1 of 2) [5/6/2010 7:14:17 PM]