Section 4m(1) of the Commodity Exchange Act; Rule 4.5; Rule 4.14(a)(8);
The Division of Trading and Markets provided no-action relief to a registered investment adviser (IA) , and any affiliate thereof, from the CPO and CTA registration requirements of Section 4m(1) of the Commodity Exchange Act in connection with their solicitation and other activities on behalf of, and advisory services for, a Canadian-organized group trust in which all investors would be Canadian pension plans. Except in limited circumstances (i.e.r because retirees moved from Canada to the United States), the beneficiaries of the pension plans would be Canadian residents, and in no case would the number of United States residents who were beneficiaries of an investor pension plan be more than 3% of a plan's total beneficiaries. Given the foreign organization of the pension plan investors, the pension plans would not be subject to regulation under ERISA, and thereby IA as CPO and CTA to the group trust would not be eligible respectively for registration exemptions pursuant to Rule 4.5 (or Division no-action relief extending this exemption to trusts consisting entirely of U.S. pension plans subject to ERISA) and Rule 4.14(a)(8). Nevertheless, the IA affirmed that although the group trust was not eligible for treatment under Rule 4.5, the investment strategies employed on behalf of the group trust would be consistent with the requirements of Rule 4.5. The Division also provided no-action relief from the CPO registration requirements to the trustee of the group trust, which was a Canadian subsidiary of a U.S. company.