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No-Action Letters

Date
No-Action Letters
01/07/2004
04-02 PDF Image; Section 2(a); No-Action
Singapore Exchange Derivatives Trading Limited’s request for No-Action relief in connection with the offer and sale of its futures contract based on the Standard & Poors CNX Nifty Index in the United States.
01/22/2004
04-05 PDF Image; Section 2(a); No-Action
The London International Financial Futures and Option Exchange Administration and Management’s request for No-Action relief in connection with the offer and sale of its futures contracts based on the FTSEurofirst 80 Index and the FTSEurofirst 100 Index in the United States.
01/22/2004
04-08 PDF Image; Sections 4m(1) and 4n(1); No-Action
A person does not need to register as a CPO or CTA with the Commission where: (1) it is located outside the territorial U.S.; (2) none of the participants in any pool it operates is a United States person; (3) no funds or other capital are contributed to a pool from United States sources; (4) it has not and will not establish a location in the United States; (5) no person affiliated with it has undertaken or will undertake any marketing activity for the purpose, or that could reasonably be expected to have the effect, of soliciting participations from United States persons; and (6) no marketing activities in connection with it will be conducted within the United States.
02/20/2004
04-09 PDF Image; Section 4d of the Commodity Exchange Act; No-Action
In CFTC Letter No. 03-28; the Division of Clearing and Intermediary Oversight granted no-action relief to permit a firm exempt from registration as a futures commission merchant (FCM) pursuant to Rule 30.10 to act as an introducing broker (IB) so as to introduce institutional U.S. customers to an affiliated FCM (US FCM) for purposes of trading US exchange-traded futures and options. Today, the Division issued a letter granting no-action relief to permit the same Rule 30.10 Firm to act as an IB so as to introduce U.S. customers to any FCM for the purpose of trading U.S. exchange-traded futures and options. The relief was predicated upon, among other conditions, an acknowledgment by US FCM that it will be jointly and severally liable for any violations of the Act or the Commission’s rules committed by Rule 30.10 Firm in connection with the latter’s handling of orders for US Customers for trading of futures and options on US Exchanges, including those orders executed by Rule 30.10 Firm and given up to another FCM.
04/02/2004
04-12 PDF Image; Section 4m(1); No-Action
The Division of Clearing and Intermediary Oversight issued a letter granting no-action relief to permit an energy management firm to provide commodity trading advice to customers, without registering as a commodity trading advisor. The relief was based upon, among other reasons, the representation that the commodity trading advice would be limited to hedging transactions on behalf of entities that qualify as "eligible contract participants" under the Commodity Exchange Act.
04/13/2004
04-14 PDF Image; Section 4d of the CEAct; No-Action
In CFTC Letter No. 04-09, the Division of Clearing and Intermediary Oversight granted no-action relief to permit a firm exempt from registration as a futures commission merchant (FCM) pursuant to rule 30.10 (rule 30.10 Firm) to act as an introducing broker (IB) so as to introduce institutional U.S. customers to any FCM, including an affiliated FCM (US FCM), for purposes of trading US exchange-traded futures and options. Today, the Division issued a letter granting similar no-action relief to a second rule 30.10 firm that also is affiliated with a US FCM. The relief granted today was predicated upon conditions corresponding to those in CFTC Letter No. 04-09 that included, among others, an acknowledgement by the US FCM that it will be jointly and severally liable for any violations of the Act or the Commission's rules committed by the rule 30.10 firm in connection with the latter's handling of orders for US Customers for trading of futures and options on US exchanges, including those orders executed by the rule 30.10 firm and given up to another FCM.
06/02/2004
04-16 PDF Image; Section 2(a); No-Action
No-Action request to permit the offer and sale in the United States of futures contracts on the Taiwan Stock Exchange Capitalization Weighted Stock Index traded on the Taiwan Futures Exchange.
07/12/2004
04-20 PDF Image; Section 4m(1) - Requirement to register as a CPO; No-Action
The Division of Clearing and Intermediary Oversight took a no-action position with respect to the failure of a co-general partner of several commodity pools (the "Funds") to register as a CPO. Consistent with prior no-action letters, the other co-general partner was a registered CPO, and the unregistered co-general partner would not participate in: (1) solicitation, acceptance or receipt of funds or property to be used for purchasing interests in the Funds; or (2) the investment, use or disposition of funds or property of the Funds. Neither co-general partner nor any principal thereof was subject to statutory disqualification, and each co-general partner cross-acknowledged in writing joint and several liability for any violation of the CEAct or CFTC rules by the other co-general partner.
08/16/2004
04-21 PDF Image; Regulations 1.10 and 1.17; No-Action
the Joint Audit Committee requested that DCIO take a temporary no-action position with respect to the reclassification of mandatorily redeemable equity of non-public futures commission merchants as debt under Statement of Financial Accounting Standard No. 150 (FSA 150), as the same had been taken by the SEC with respect to non-public broker dealers. Based on an analysis that non-public futures commission merchants may be similarly affected by FAS 150, the Division issued a no-action position for the year commencing December 15, 2003, in order to provide such futures commission merchants additional time to restructure any such interests desired on order to avoid the reclassification for net capital and debt-equity ratios.
08/30/2004
04-24 PDF Image; Section 2(a); No-Action
Request for no-action relief in connection with the offer and sale in the United States of the S&P/MIB Index Futures Contract and miniFutures Contract traded on the Mercato Italino dei Derivati.
10/01/2004
04-26 PDF Image; 4d(b) of the CEAct & Regulation 1.20; No-Action
Two futures commission merchants requested that they be permitted to deduct bank fees for customer-segregated bank accounts directly from such accounts in which customer funds were held. Bank fees for the maintenance of such accounts are expenses of the futures commission merchant and not of its customers. Section 4d(b) of the Commodity Exchange Act prohibits any person, including any depository, that has received money, securities or property in a segregated account from holding, disposing of or using any such money, securities or property as belonging to the depositing futures commission merchant or any person other than the customers of such futures commission merchant. Based on the Division's determination that the fees in questions were de minimus, that the futures commission merchants in question maintained excess funds in segregation and had residual interests in the funds in segregated accounts greater than such fees, and that the administrative burden upon such futures commission merchants to pay such fees separately from other non-segregated accounts therefore appeared unnecessary, the Division issued two no-actions letters to the respective futures commission merchants with respect to the payment of such fees directly from the customer-segregated bank accounts upon the conditions specified therein.
10/01/2004
04-27 PDF Image; 4d(b) of the CEAct & Regulation 1.20; No-Action
Two futures commission merchants requested that they be permitted to deduct bank fees for customer-segregated bank accounts directly from such accounts in which customer funds were held. Bank fees for the maintenance of such accounts are expenses of the futures commission merchant and not of its customers. Section 4d(b) of the Commodity Exchange Act prohibits any person, including any depository, that has received money, securities or property in a segregated account from holding, disposing of or using any such money, securities or property as belonging to the depositing futures commission merchant or any person other than the customers of such futures commission merchant. Based on the Division's determination that the fees in questions were de minimus, that the futures commission merchants in question maintained excess funds in segregation and had residual interests in the funds in segregated accounts greater than such fees, and that the administrative burden upon such futures commission merchants to pay such fees separately from other non-segregated accounts therefore appeared unnecessary, the Division issued two no-actions letters to the respective futures commission merchants with respect to the payment of such fees directly from the customer-segregated bank accounts upon the conditions specified therein.
10/25/2004
04-31 PDF Image; Section 5 and 5a of the CEA; No-Action
The Division of Market Oversight issued a letter amending the no-action relief granted August 10, 1999, permitting Eurex Deutschland (Eurex) members to install additional electronic trading terminals in the U.S., to list certain new contracts for trading from Eurex terminals in the U.S., and to authorize the use of automated order routing systems without obtaining contract market designation pursuant to sections 5 and 5a of the CEA. The amendment permits participants of the Clearing Corporation (CCorp) to carry positions in Eurex products pursuant to the Euro-link agreement between CCorp and Eurex Clearing AG without Eurex obtaining contract market designation or registration as a derivatives transaction execution facility pursuant to sections 5 and 5a of the CEA.
10/25/2004
04-32 PDF Image; Sections 5 and 5a of the CEA; No-Action
The Division of Market Oversight issued a letter amending the no-action relief granted August 11, 1999, permitting the Sydney Futures Exchange Limited (SFE) to make its electronic trading and order matching system, known as SYCOM?, available to its members in the U.S. without obtaining contract market designation pursuant to sections 5 and 5a of the CEA. The amendment permits SFE to make SYCOM? available to non-Exchange Participants in the U.S. without obtaining contract market designation or registration as a derivatives transaction execution facility pursuant to sections 5 and 5a of the CEA.
10/25/2004
04-33 PDF Image; Sections 5 and 5a of the CEA; No-Action
The Division of Market Oversight issued a letter granting no-action relief to permit the European Energy Exchange (EEX), and its operator European Energy Exchange AG, to make its electronic trading and order matching system available to EEX trading participants in the U.S. without obtaining contract market designation or registration as a derivatives transaction execution facility pursuant to sections 5 and 5a of the CEA.
09/16/2004
04-34 PDF Image; Section 1a(23); Regulation 1.3(mm); No-Action
The Division of Clearing and Intermediary Oversight confirmed that it would not recommend that the Commission commence an enforcement action against a software vendor based on its failure to register as an introducing broker in connection with its marketing of a software program with the ability to access the order-entry system of the futures commission merchant (FCM) or introducing broker (IB) of the end users' choice. This relief is subject to the conditions that: (1) the data feeds containing market information are provided by unaffiliated third parties who do not give compensation to, or receive compensation from, the software provider or its affiliate for providing market data to customers; (2) the software does not provide express "buy" or "sell" signals; (3) customers' will select their own FCMs or IBs and negotiate any and all fees for executing trades between themselves and the FCM or IB; (4) the software provider will not solicit orders for, or recommend, propose, or encourage customers to use, any particular FCM or IB; (4) the software will reside on customers' computers and the orders will go directly from the end user to the executing FCM or IB without the software provider seeing details of an individual order; and (5) the software provider will be compensated by fees that are paid to it by the customer, and are not associated with the fees charged by the FCM or IB for the placement of customer orders.
12/15/2004
04-35 PDF Image; Section 5 and 5a of the CEAct; No-Action
The Division of Market Oversight issued a letter granting no-action relief to permit the Winnipeg Commodity Exchange, Inc. (WCE) to make its electronic trading and order matching system, known as the e-cbot? trading platform powered by LIFFE CONNECT?, available to WCE participants in the U.S. without obtaining contract market designation or registering as a derivatives transaction execution facility pursuant to Sections 5 and 5a of the CEAct.
07/26/2004
04-36 PDF Image; Sections 4a, 4c(b), 4g, and 4i of the Act; part 15 and parts 17 to 19 of the Commission's Regulations; No-Action
The no-action relief permits compliance with an alternate reporting level for low notional value HedgeStreet contracts.
12/10/2004
05-02 PDF Image; Rule 30.4(a) and 30.1(e); No-Action
The Division of Clearing and Intermediary Oversight issued a letter granting no-action relief to permit the U.S. affiliate of a futures commission merchant (FCM) to execute and clear foreign futures and foreign options transactions for the foreign futures and options customer omnibus accounts of the FCM without the affiliate having to register as an FCM pursuant to Rule 30.4(a). Rule 30.4(a) provides that a foreign futures and options broker (FFOB), as defined in Rule 30.1(e), is not required to register with the Commission as an FCM if, among other things, the FFOB solely accepts orders or carries an FCM's foreign futures and options customer omnibus account(s). Although the affiliate conducts no brokerage or trading activities in the U.S. and is a member of a foreign board of trade and subject to regulation in the jurisdiction in which the foreign board of trade is located, the affiliate does not satisfy the Rule 30.1(e) definition of FFOB because it is not a "non-U.S. person" by virtue of its incorporation in the U.S. Absent relief, the affiliate would be precluded from operating pursuant to Rule 30.4(a) without obtaining registration as an FCM. Among other things, the relief is conditioned upon the FCM's acknowledgment that it will be jointly and severally liable for any violations of the Act or the Commission's rules committed by the foreign affiliate in connection with those activities.

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