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Exemptive Letters

Date
Exemptive Letters
02/12/1997
97-05 PDF Image; Rule 4.14(a)(8), Section 4m(1); Exemption
The Division of Trading and Markets permitted a registered investment adviser to rely on an exemption from CTA registration provided by Rule 4.14(a)(8), despite the fact that the entity for which advice was being provided, an offshore fund having no U.S. investors, was not a qualify entity under Rule 4.5. The adviser provided commodity trading advice which was "solely incidental" to its business of providing securities advice, agreed to employ only those strategies which were consistent with the eligibility status under Rule 4.5(c)(2), and did not otherwise hold itself out as a CTA.
02/06/1997
97-09 PDF Image; Rule 4.31; Exemption
The Division of Trading and Markets granted an exemption to a commodity trading advisor (CTA) from the requirement that the CTA prepare and deliver a Disclosure Document pursuant to Rule 4.31. The CTA was selected to be the investment advisor for a foreign fund which accepted investments only from non-United States persons. In an issue of first impression, although some of the CTA's clients were United States persons, they were all qualified eligible clients for whom the CTA claimed relief from Rule 4.31. The Division exempted the CTA from compliance with Rule 4.31 solely with respect to its contemplated services on behalf of the fund.
03/21/1997
97-17; Rule 4.7(a); Exemption
The Division of Trading and Markets provided relief under Rule 4.7(a) to a registered CPO, notwithstanding the presence of two non-QEPs in its pool, where one non-QEP is a member of the CPO and affiliated CTA and the other non-QEP is an employee of an affiliated CTA. Each non-QEP has ready access to information pertinent to an investment in the pool and agrees to be treated as QEP.
03/24/1997
97-18 PDF Image; Rules 4.21, 4.22(a) and (b), 4.24, 4.25, 4.26; Exemption
The Division of Trading and Markets permitted a registered CPO/CTA to continue to claim relief under Rules 4.21, 4.22(a) and (b), 4.24, 4.25, 4.26 from certain disclosure and monthly reporting requirements despite the acceptance of additional limited partners (New Limited Partners) as investors in a commodity pool that invests primarily in U.S. securities. The CPO/CTA will: (1) provide each New Limited Partner with the pool's Limited Partnership Agreement, Private Placement Memorandum, quarterly financial statements and audited annual financial statements; (2) notify each New Limited Partner that the pool is operated pursuant to exemptive relief granted by the Division; (3) explain the nature and purpose of such exemption; (4) obtain from each New Limited Partner has written acknowledgment that he does not object to the pool's operation pursuant to exemptive relief; and (5) cause any New Limited Partner who ceases to be an employee of the CPO or the pool's co-investment manager to redeem or transfer his interests in the pool. In addition, all limited partners will have access to the pool's books and records.
03/27/1997
97-19 PDF Image; Rules 4.23 and 4.33; Exemption
The Division of Trading and Markets provided exemptive relief to a registered CPO and CTA from the books and records location requirements of Rules 4.23 and 4.33 such that the CPO/CTA may maintain its books and records at the main business office of an affiliated company that was established primarily to provide operational support to the CPO/CTA.
04/21/1997
97-35 PDF Image; Rule 4.22; Exemption
The Division of Trading and Markets granted a commodity pool operator a permanent extension of time in which to comply with the quarterly report requirements of Commission Rule 4.7(a)(2)(ii) in connection with the operation of two commodity pools. Each commodity pool was organized as a fund of funds and relief was conditioned on investors being informed of the extension of time granted to the commodity pool operator.
04/21/1997
97-36 PDF Image; Rule 4.22; Exemption
The Division of Trading and Markets granted a commodity pool operator a permanent extension of time in which to comply with the annual report requirements of Commission Rule 4.7(a)(2)(ii) in connection with the operation of four commodity pools. Each commodity pool was organized as a fund of funds and relief was conditioned on investors being informed of the extension of time granted to the commodity pool operator.
05/28/1997
97-42 PDF Image; Rule 4.31; Exemption
The Division of Trading and Markets exempted a registered CTA from compliance with Rule 4.31 in that it was not required to provide a disclosure document to an offshore fund for which it had discretionary authority to trade commodity interests. The registered CTA had only one client, which was the offshore fund.
06/24/1997
97-51 PDF Image; Rule 4.22(d); Exemption
The Division of Trading and Markets granted the CPO of a commodity pool relief from the requirement of Rule 4.22(d) that the financial statements in the Annual Report that a registered CPO must prepare and distribute be certified by an independent public accountant. The CPO, who previously had claimed the exemption from CPO registration in Rule 4.13(a)(2), is the president and sole principal of a corporation that subsequently registered as a CPO. The commodity pool consists of eight limited partners who are all family members of the CPO and who receive detailed unaudited monthly reports and annual tax returns for the pool.
06/23/1997
97-55 PDF Image; Rule 4.7(a)(2)(iv); Exemption
The Division of Trading and Markets exempted a CPO from the requirements of Rule 4.7(a) (2) (iv) to maintain the original books and records for a pool at its main business office in the United States (U.S.) based upon the conditions that: (1) the CPO maintain duplicates of the pool's books and records at its main business office; and (2) within 72 hours after a request by a duly qualified representative of the Commission, the National Futures Association or the Department of Justice, the CPO make available originals of the pool's books and records to the representative at a place located in the U.S. as specified by the representative. The CPO maintained the pool's original books and records offshore to comply with the requirements of Irish law, under which the pool had been formed.
07/02/1997
97-59; Rule 4.7(a)(2)(iv)&(b)(2)(ii); Exemption
The Division of Trading and Markets exempted a registered CPO and CTA from the location requirements of Rule 4.7(a)(2)(iv) and (b)(2)(ii) permitting it to maintain the original books and records specified by those rules at the main business office of the entity that performs administrative services for the CPO/CTA. The exemption is subject to the conditions that the registered CPO/CTA: (1) maintains copies of the books and records at its office; and (2) remains responsible for the maintenance of all required books and records, and for assuring their availability to the Commission, the National Futures Association and any other agency authorized to inspect such books and records.
07/01/1997
97-61; Rule 4.7(a); Exemption
The Division of Trading and Markets permitted a registered CPO to claim relief under Rule 4.7(a) with respect to Class B units of a limited liability company (LLC), notwithstanding the presence in the LLC of non QEP unitholders; the LLC may invest in exempt pools without regard to the ten percent limitation of Rule 4.7(a).
07/15/1997
97-62 PDF Image; Rule 4.21, Rule 4.23(a); Exemption
The Division of Trading and Markets (Division) granted an exemption from Rule 4.21 to the CPO and general partner of a commodity pool "master" fund with respect to delivering a Disclosure Document to prospective participants in the master fund. These prospective participants were two commodity pool "feeder" funds of which the CPO and general partner was also the CPO and general partner of the master fund. The Division also granted an exemption from Rule 4.23(a) concerning the location of the original books and records of the master fund.
07/09/1997
97-66 PDF Image; Rules 4.7(a)(2)(iv) and (b)(2)(ii); Exemption
A registered CPO and CTA was exempted from the books and records location requirements of Rules 4.7(a)(2)(iv) and (b)(2)(ii) such that the CPO/CTA may maintain the books and records of a pool containing United States persons as investors at the offshore offices of the pool's administrator. This relief is subject to the condition, among others, that the CPO/CTA will cooperate in any information sharing arrangements between the country where the books and records are to be kept and the United States.
08/06/1997
97-68 PDF Image; Rule 4.31; Exemption
The Division of Trading and Markets confirmed that a registered commodity trading advisor could continue to claim relief from the disclosure document requirement of Rule 4.31 in connection with providing commodity interest trading advice to an offshore fund which would have as participants non-United States persons as well as qualified eligible clients.
08/21/1997
97-69 PDF Image; Rules 4.7(a)(2)(ii) and (iii); Exemption
The CPO of a commodity pool was exempted from preparing and distributing the quarterly statements and Annual Reports required under Rules 4.7(a)(2)(ii) and (iii) in connection with a commodity pool whose sole limited partner is the Individual Retirement Account (IRA) of an attorney who is a senior partner at a law firm that provides counsel to the CPO.
08/19/1997
97-70 PDF Image; Rules 4.21, 4.22 and 4.23(a)(10) and (a)(11); Exemption
The CPO of a commodity pool was exempted from the disclosure, reporting and recordkeeping requirements of Rules 4.21, 4.22 and 4.23(a)(10) and (a)(11) in connection with a commodity pool whose interests will be offered exclusively to members of the CPO's immediate family and his wife's immediate family. Limited partners receive detailed unaudited monthly reports and annual tax returns for the pool.
10/10/1997
97-88 PDF Image; Section 4m (1); Exemption
The Division of Trading and Markets permitted a registered investment adviser to rely on an exemption from CTA registration provided by Rule 4.14(a)(8), despite the fact that the entities for which the advice was being provided, two Canadian funds having no U.S. investors, were not qualifying entities under Rule 4.5. The advisor provided commodity trading advice which was "solely incidental" to its business of providing securities advice, agreed to employ only those strategies which were consistent with the eligibility status under Rule 4.5(c)(2), and did not otherwise hold itself out as a CTA.
11/12/1997
98-08 PDF Image; Rule 4.23; Exemption
The Division of Trading and Markets exempted a CPO from the requirements of Rule 4.23 to maintain the original books and records for a pool at its main business office in New Jersey based upon the conditions that: (1) the CPO notify the Division if the location of any such records changes from that a represented to the Division; (2) the CPO remains responsible for the maintenance of all required books and records and for assuring their availability to the Commission; (3) within 48 hours after as request by a duly qualified representative of the Commission, the National Futures Association or the Department of Justice, the CPO will obtain the original books and records from its branch office in New Jersey and provide them for inspection at its main business office in Tennessee; and (4) that the CPO disclose in the Disclosure Document for each pool it operators that all Commission-required books and records are kept at its branch office in New Jersey.

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