CFTC Staff Letters

The CPO of a commodity pool that operated pursuant to an exemption under Regulation 4.7 requested exemptive relief to permit it to file a final annual report for the period from January 1, 2008 through January 31, 2009. The Pool had nine participants on the date that the Trustee for the Pool determined to liquidate and a net asset value of $3X,XXX,XXX. The Pool made its final distribution to participants on January 31, 2009. DIO granted relief pursuant to Commission Regulations 140.93 and 4.12(a).

The CPO of a commodity pool with illiquid assets requested relief from the ongoing reporting requirements under Part 4. The CPO intended to file an Annual Report for the Pool for the 2008 fiscal year, which would contain information regarding those assets. DCIO granted relief pursuant to Regulations 140.93 and 4.12(a), but conditioned such relief on the following representations being made to the Commission and participants: the Pool has ceased trading; the pertinent facts regarding the illiquid assets, including, but not limited to, the value of the assets and the percentage of the Pool’s NAV that the illiquid assets represent; the pertinent facts regarding the value of any liquid assets presently being held by the Pool that have not been distributed to participants and the reasons for their retention; a representation that no additional fees will be deducted from the assets held by the Pool; the pertinent facts regarding the disposition of any income generated by the assets held by the Pool, if any; a representation regarding whether any assets have been distributed to participants; and a representation regarding the distribution of assets on a pro rata basis to participants. Additionally, DCIO required that the CPO make a final disclosure to the Commission and participants upon the final disbursement of the Pool’s assets.

The Division of Clearing and Intermediary Oversight provided no-action relief to the general partner of a commodity pool from registering as a CPO under Section 4m(1) of the Commodity Exchange Act, and allowed an affiliated, registered CPO (“designee”) to serve as the CPO of the pool instead, where, among other things: (1) the general partner and the designee are under common ownership and control; (2) the general partner has delegated all of its management authority to the designee; (3) the general partner does not engage in the solicitation of investors for the pool and does not manage property of the pool; and (4) the general partner and designee executed and submitted to the Division a written acknowledgement of joint and several liability for any violation by either of them of the Act or the Commission’s regulations.

The Division of Clearing and Intermediary Oversight provided no-action relief to the general partner of a commodity pool from registering as a CPO under Section 4m(1) of the Commodity Exchange Act, and allowed an affiliated, registered CPO (“designee”) to serve as the CPO of the pool instead, where, among other things: (1) the general partner and the designee are under common ownership and control; (2) the general partner has delegated all of its management authority to the designee; (3) the general partner does not engage in the solicitation of investors for the pool and does not manage property of the pool; and (4) the general partner and designee executed and submitted to the Division a written acknowledgement of joint and several liability for any violation by either of them of the Act or the Commission’s regulations.

Hong Kong Futures Exchange Limited’s Request for No-Action Relief in Connection with the Offer and Sale of its Mini Futures Contracts Based on the Hang Seng Index and the Hang Seng China Enterprises Index in the United States.

The Division of Market Oversight issued a no-action letter to BNP Paribas confirming that the Division will not recommend that the Commission initiate enforcement action against BNP Paribas or Fortis Bank S.A./N.V., or their respective affiliates, for violation of Commission or exchange speculative position limits, to the extent any such violation results from the application of the Commission’s aggregation policy and rules to the acquisition by BNP Paribas of Fortis Bank. The no-action relief applies only to aggregated positions created by the acquisition by BNP Paribas of Fortis Bank and is subject to the following conditions: (1) BNP Paribas and Fortis Bank must proceed promptly following the acquisition to verify compliance with applicable limits or to identify and implement, not later than January 15, 2009, any measures that may be necessary to ensure compliance prospectively with applicable limits, and (2) BNP Paribas and Fortis Bank must not, following the acquisition and prior to January 15, 2009, further add to any aggregated positions found not to be in compliance with Commission or exchange speculative position limits.

Korea Exchanges Request for No-Action Relief in Connection with the Offer and Sale in the United States of its Futures Contract Based on the KOSPI 200 Stock Index Futures Contract.

Thailand Futures Exchange Pcls Request for No-Action Relief in Connection with the Offer and Sale in the United States of its Futures Contract Based on the SET50 Index Futures Contract.

The Division of Market Oversight issued a letter granting no-action relief to permit the Brazilian Derivatives Exchange, BM&F Bovespa S.A. – Bolsa de Valores, Mercadorias e Futuros (BM&F), to make its electronic trading and order matching system (GTS) available to persons that have been authorized to directly access GTS from the United States without obtaining contract market designation or registration as a derivatives transaction execution facility pursuant to Sections 5 and 5a of the Commodity Exchange Act, respectively. The relief applies, subject to conditions, to (1) persons located in the U.S. that have been authorized by the Chicago Mercantile Exchange (CME) to have access to a Globex terminal and that, pursuant to the BM&F-CME Order Routing Agreement, have been granted the right to directly access GTS through a Globex terminal; (2) futures commission merchants (FCM) that submit orders for execution to GTS using the GTS application programming interface (API) for proprietary accounts or from or on behalf of U.S. foreign futures and options customers; and (3) a foreign futures or options customer (authorized customer) of an FCM or a firm that is exempt from registration as an FCM pursuant to Commission Rule 30.10 (Rule 30.10 Firm) that is authorized by an entity with access rights to BM&F (authorized entity) to enter orders directly into the trading system using the GTS API; provided that the authorized entity has a clearing relationship with a BM&F Settlement Rights Holder (clearing member) and, as a requirement for and as a condition of the authorized entity’s permitting direct access to the BM&F GTS API by the authorized customer, the BM&F Settlement Rights Holder, among other things, guarantees and assumes all financial responsibility for all activity conducted through the authorized customer’s direct market access connection.

DCIO received a request for guidance from the Joint Audit Committee concerning FCM regulatory reporting requirements for investments in a money market mutual fund. The fund had announced that its net asset value per share had fallen from $1.00 and that, as permitted by order of the SEC dated September 22, 2008, the fund had suspended redemptions and postponed payments. DCIO advised that until further notice the investments should be reported as of certain dates at the net asset values specified in the letter, and continue to be subject to a 2% deduction when calculating adjusted net capital.