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No-Action Letters

Date
No-Action Letters
02/13/2007
07-01 PDF Image; Section 4m(1) of the Commodity Exchange Act; No-Action
The Division of Clearing and Intermediary Oversight issued a letter granting no-action relief to permit a registered commodity trading advisor to withdraw its registration in connection with the provision of commodity interest trading advice to customers who trade wholesale electricity and natural gas. This relief was based upon, among other reasons, the representations that: (i) the commodity trading advisor was formed as a non-profit corporation as an alliance of public power utilities; (ii) the commodity trading advice provided by the commodity trading advisor would be limited to managing risk in the power and natural gas markets on behalf of entities that qualify as “eligible contract participants” under the Commodity Exchange Act; and (iii) the commodity trading advisor would not advertise or solicit any commodity futures trading services, nor manage any speculative accounts.
03/06/2007
07-02 PDF Image; Sections 5 and 5a of the Act; No-Action
The Division of Market Oversight issued a letter granting no-action relief to permit the Tokyo Financial Exchange, Inc. (TFX), to make its electronic trading and order matching system (LIFFE CONNECT™), as well as its Application Program Interface (API), available to TFX members 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 CEAct. The relief applies to TFX members trading for their own accounts; TFX members who are registered as futures commission merchants (FCMs) or who are exempt from such registration pursuant to CFTC Rule 30.10 (Rule 30.10 Firms) submitting orders from or on behalf of U.S. customers to LIFFE CONNECT™ for execution or accepting orders for U.S. customers transmitted via automated order routing systems for transmission to LIFFE CONNECT™; and TFX members who are registered as Commodity Pool Operators (CPO) or Commodity Trading Advisors (CTA), or who are exempt from such CPO or CTA registration pursuant to Commission Regulation 4.13 or 4.14, submitting orders to LIFFE CONNECT™ on behalf of U.S. pools they operate or U.S. customer accounts for which they have discretionary authority, respectively, provided that an FCM or Rule 30.10 Firm acts as clearing firm and guarantees without limitation all such trades of the CPO or CTA effected through submission of orders on LIFFE CONNECT™.
03/05/2007
07-03 PDF Image; Sections 5 and 5a of the Act; No-Action
Confirmation that no-action relief granted to LIFFE Administration and Management extends to futures contracts on the FTSEurofirst 80 Index and FTSEurofirst 100 Index traded on Euronext Paris SA.
04/17/2007
07-04 PDF Image; Section 2(a); No-Action
Confirmation of No-Action Relief to Offer and Sell in the United States Stockholm Stock Exchange Ltd.'s Standardized Futures Contract Based on the OMXS30 Index.
04/26/2007
07-05 PDF Image; Section 4d of the Commodity Exchange Act; No-Action
The Division of Clearing and Intermediary Oversight issued a letter granting no-action relief to permit two foreign affiliates of a U.S. futures commission merchant (“US FCM”) to act as an introducing broker (“IB”) so as to introduce institutional U.S. customers to any registered FCM for purposes of trading U.S. exchange-traded futures and options, without registering as an IB under the Commodity Exchange Act (“Act”). Pursuant to Regulation 30.10, the foreign affiliates have been granted an exemption from registration as an FCM for purposes of offering foreign futures and options to U.S. customers. The Regulation 30.10 relief, however, does not extend to any activities related to trading, directly or indirectly, on U.S. exchanges. 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 regulations committed by the foreign affiliates in connection with the latter’s handling of orders for U.S. customers for trading of futures and options on U.S. exchanges, including those orders executed by a foreign affiliate and given up to another FCM.
05/24/2007
07-06 PDF Image; Sections 5 and 5a of the Commodity Exchange Act; No-Action
The Division of Market Oversight issued a letter granting no-action relief to permit the Dubai Mercantile Exchange Limited (DME), to make its electronic trading and order matching system (DME Direct), available to DME members and guaranteed customers 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 CEAct. The relief applies to DME members and guaranteed customers trading for their own accounts; DME members and guaranteed customers who are registered as futures commission merchants (FCMs) or who are exempt from such registration pursuant to CFTC Rule 30.10 (Rule 30.10 Firms) submitting orders from or on behalf of U.S. customers to DME Direct for execution or accepting orders for U.S. customers transmitted via automated order routing systems for transmission to DME Direct; and DME members and guaranteed customers who are registered as Commodity Pool Operators (CPO) or Commodity Trading Advisors (CTA), or who are exempt from such CPO or CTA registration pursuant to Commission Regulation 4.13 or 4.14, submitting orders to DME Direct on behalf of U.S. pools they operate or U.S. customer accounts for which they have discretionary authority, respectively, provided that an FCM or Rule 30.10 Firm acts as clearing firm and guarantees without limitation all such trades of the CPO or CTA effected through submission of orders on DME Direct.
05/24/2007
07-07 PDF Image; Section 2(a) of the Commodity Exchange Act; No-Action
No-Action Relief to Offer and Sell in the United States Singapore Exchange Derivatives Trading Limited's (SGX-DT) U.S. Dollar Denominated Nikkei 225 Index Futures Contract.
05/30/2007
07-08 PDF Image; Section 4d of the Commodity Exchange Act; No-Action
Division of Clearing and Intermediary Oversight issued a letter granting no-action relief to permit the foreign affiliate of a U.S. futures commission merchant (“US FCM”) to act as an introducing broker (“IB”) so as to introduce institutional U.S. customers to any registered FCM for purposes of trading U.S. exchange-traded futures and options, without registering as an IB under the Commodity Exchange Act (“Act”). Pursuant to Regulation 30.10, the foreign affiliate has been granted an exemption from registration as an FCM for purposes of offering foreign futures and options to U.S. customers. The Regulation 30.10 relief, however, does not extend to any activities related to trading, directly or indirectly, on U.S. exchanges. 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 regulations committed by the foreign affiliate in connection with the latter’s handling of orders for U.S. customers for trading of futures and options on U.S. exchanges, including those orders executed by a foreign affiliate and given up to another FCM.
06/25/2007
07-10 PDF Image; Section 4d(a)(1) requirement to register as an introducing broker; No-Action
The Division of Clearing and Intermediary Oversight took a no-action position with respect to two APs of an IB receiving per-trade compensation through their respective corporations (instead of directly) without registering the corporations as IBs. This position was based upon, among other facts, that: (1) the corporations were each registered as a CTA; (2) the CTAs would disclose to their customers the manner in which the APs receive compensation; and (3) the APs and their respective CTAs acknowledged joint and several liability for any violation of the Act or of Commission regulations.
06/18/2007
07-11 PDF Image; Section 2(a) of the Commodity Exchange Act; No-Action
Eurex Deutschland's Request for No-Action Relief in Connection with the Offer and Sale in the United States of its Dow Jones STOXX 600 Index Futures Contract and its Dow Jones STOXX Mid 200 Index Futures Contract.
08/23/2007
07-15 PDF Image; Regulation 1.65(a); No-Action
The Division of Clearing and Intermediary Oversight (DCIO) granted no-action relief from the customer consent requirements of Regulation 1.65(a) to a transferee firm where the transferor firm was believed to be undercapitalized and the transfer was taking place as soon as possible. DCIO stated that, because of the exigent circumstances, granting relief would not be contrary to the public interest. DCIO also noted that the Commission recognized that, when it adopted Regulation 1.65(a), the normal ten-business-day advance notice of bulk transfers would not be applicable in a financial emergency.
08/21/2007
07-16 PDF Image; Section 4d of the Commodity Exchange Act; No-Action
The Division of Clearing and Intermediary Oversight issued a letter granting no-action relief to permit the foreign affiliate of a U.S. futures commission merchant (“US FCM”) to act as an introducing broker (“IB”) so as to introduce institutional U.S. customers to any registered FCM for purposes of trading U.S. exchange-traded futures and options, without registering as an IB under the Commodity Exchange Act (“Act”). Pursuant to Regulation 30.5, the foreign affiliate has been granted an exemption from registration as an IB for purposes of offering foreign futures and options to U.S. customers. The Regulation 30.5 relief, however, does not extend to any activities related to trading, directly or indirectly, on U.S. exchanges. 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 regulations committed by the foreign affiliate in connection with the latter’s handling of orders for U.S. customers for trading of futures and options on U.S. exchanges, including those orders executed by a foreign affiliate and given up to another FCM.
08/21/2007
07-17 PDF Image; Section 4d of the Commodity Exchange Act; No-Action
The Division of Clearing and Intermediary Oversight issued a letter granting no-action relief to permit the foreign affiliate of a U.S. futures commission merchant (“US FCM”) to act as an introducing broker (“IB”) so as to introduce institutional U.S. customers to any registered FCM for purposes of trading U.S. exchange-traded futures and options, without registering as an IB under the Commodity Exchange Act (“Act”). Pursuant to Regulation 30.10, the foreign affiliate has been granted an exemption from registration as an IB for purposes of offering foreign futures and options to U.S. customers. The Regulation 30.10 relief, however, does not extend to any activities related to trading, directly or indirectly, on U.S. exchanges. 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 regulations committed by the foreign affiliate in connection with the latter’s handling of orders for U.S. customers for trading of futures and options on U.S. exchanges, including those orders executed by a foreign affiliate and given up to another FCM.
09/13/2007
07-18 PDF Image; Section 4m(1) – CPO registration requirement; No-Action
The Division of Clearing and Intermediary Oversight took a CPO registration no-action position with respect to the general partner of a commodity pool such that the investment manager of the pool could serve as the registered CPO of the pool instead of the pool’s general partner. This position was based upon representations that: (1) the investment manager was registered as a CPO; (2) the general partner and the investment manager were under common ownership and control; (3) the general partner did not engage in solicitation of pool participants or any other pool operator functions; and (4) the general partner and the investment manager executed cross acknowledgments of joint and several liability for any violations by the other of the CEA and Commission rules. The no-action position was expressly conditioned upon continued registration as a CPO of the investment manager.
09/13/2007
07-19 PDF Image; Section 4m(1) – CPO registration requirement; No-Action
The Division of Clearing and Intermediary Oversight took a CPO registration no-action position with respect to the general partner of a commodity pool such that the investment manager of the pool could serve as the registered CPO of the pool instead of the pool’s general partner. This position was based upon representations that: (1) the investment manager was registered as a CPO; (2) the general partner and the investment manager were under common ownership and control; (3) the general partner did not engage in solicitation of pool participants or any other pool operator functions; and (4) the general partner and the investment manager executed cross acknowledgments of joint and several liability for any violations by the other of the CEA and Commission rules. The no-action position was expressly conditioned upon continued registration as a CPO of the investment manager.
10/18/2007
07-20 PDF Image; Section 4d of the Commodity Exchange Act; No-Action
The Division of Clearing and Intermediary Oversight issued a letter granting no-action relief to permit the foreign affiliates of a U.S. futures commission merchant ("US FCM") to act as an introducing broker ("IB") so as to introduce institutional U.S. customers to any registered FCM for purposes of trading U.S. exchange-traded futures and options, without registering as an IB under the Commodity Exchange Act ("Act"). Pursuant to Regulation 30.10, the foreign affiliates have been granted an exemption from registration as an FCM for purposes of offering foreign futures and options to U.S. customers. The Regulation 30.10 relief, however, does not extend to any activities related to trading, directly or indirectly, on U.S. exchanges. 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 regulations committed by any foreign affiliate in connection with the latter’s handling of orders for U.S. customers for trading of futures and options on U.S. exchanges, including those orders executed by a foreign affiliate and given up to another FCM.
11/13/2007
07-21 PDF Image; Section 2(a); No-Action
No-Action Relief to Offer and Sell in the United States OMX Nordic Exchange Stockholm AB Futures Contract Based on the VINX30 Index.
11/08/2007
07-23 PDF Image; Section 4d of the Commodity Exchange Act; No-Action
The Division of Clearing and Intermediary Oversight issued a letter granting no-action relief to permit the foreign affiliates of a U.S. futures commission merchant (“US FCM”) to act as an introducing broker (“IB”) so as to introduce institutional U.S. customers to any registered FCM for purposes of trading U.S. exchange-traded futures and options, without registering as an IB under the Commodity Exchange Act (“Act”). Pursuant to Regulation 30.10, the foreign affiliates have been granted an exemption from registration as an FCM for purposes of offering foreign futures and options to U.S. customers. The Regulation 30.10 relief, however, does not extend to any activities related to trading, directly or indirectly, on U.S. exchanges. 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 regulations committed by any foreign affiliate in connection with the latter’s handling of orders for U.S. customers for trading of futures and options on U.S. exchanges, including those orders executed by a foreign affiliate and given up to another FCM.

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