[Code of Federal Regulations]
[Title 17, Volume 1]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 17CFR4.13]

[Page 175-176]
 
              TITLE 17--COMMODITY AND SECURITIES EXCHANGES
 
             CHAPTER I--COMMODITY FUTURES TRADING COMMISSION
 
PART 4--COMMODITY POOL OPERATORS AND COMMODITY TRADING ADVISORS--Table of Contents
 
        Subpart A--General Provisions, Definitions and Exemptions
 
Sec. 4.13  Exemption from registration as a commodity pool operator.

    (a) A person is not required to register under the Act as a 
commodity pool operator if:
    (1)(i) It does not receive any compensation or other payment, 
directly or indirectly, for operating the pool, except reimbursement for 
the ordinary administrative expenses of operating the pool;
    (ii) It operates only one commodity pool at any time;
    (iii) It is not otherwise required to register with the Commission 
and is not a business affiliate of any person required to register with 
the Commission; and
    (iv) Neither the person nor any other person involved with the pool 
does any advertising in connection with the pool (for purposes of this 
section, advertising includes the systematic solicitation of prospective 
participants by telephone or seminar presentation); or
    (2)(i) The total gross capital contributions it receives for units 
of participation in all of the pools that it operates or that it intends 
to operate do not in the aggregate exceed $200,000; and
    (ii) None of the pools operated by it has more than 15 participants 
at any time. For purposes of computing the number of participants for 
paragraph (a)(2)(ii) of this section, the following participants shall 
be excluded:
    (A) The pool's operator, commodity trading advisor, and the 
principals thereof; and
    (B) Any relative, spouse or relative of such spouse living in the 
same household as such participant.
    (b)(1) No person who is exempt from registration as a commodity pool 
operator under paragraph (a)(1) or (a)(2) of this section and who is not 
registered as such pursuant to that exemption may, directly or 
indirectly, solicit, accept or receive funds, securities or other 
property from any prospective participant in a pool that it operates or 
that it intends to operate unless, on or before the date it engages in 
that activity, the person delivers or causes to be delivered to the 
prospective participant a written statement that must disclose this fact 
as follows: ``The commodity pool operator of this pool is not required 
to register, and has not registered, with the Commodity Futures Trading 
Commission. Therefore, unlike a registered commodity pool operator, this 
commodity pool operator is not required by the Commission to furnish a 
Disclosure Document, periodic Account Statements, and an Annual Report 
to participants in the pool.'' The person must:
    (i) Describe in the statement the exemption pursuant to which it is 
not registered as a commodity pool operator;
    (ii) Provide its name, main business address and main business 
telephone number on the statement;
    (iii) Manually sign the statement as follows: if such person is a 
corporation, by the chief executive officer, chief financial officer or 
counterpart thereto; if a partnership, by a general partner;

[[Page 176]]

and if a sole proprietorship, by the sole proprietor; and
    (iv) By the earlier of seven business days after the date the 
statement is first delivered to a prospective participant and the date 
upon which the pool commences trading in commodity interests:
    (A) File two copies of the statement with the Commission at the 
address specified in Sec. 4.2; and
    (B) File one copy of the statement with the National Futures 
Association at its headquarters office (Attn: Director of Compliance, 
Compliance Department).
    (2) Each person who is exempt from registration as a commodity pool 
operator under paragraph (a)(1) or (a)(2) of this section and who is not 
registered as such pursuant to that exemption must:
    (i)(A) Promptly furnish to each participant in each pool that it 
operates a copy of the monthly statement for the pool that such person 
received from a futures commission merchant pursuant to Sec. 1.33, and
    (B) Clearly show on such statement, or on an accompanying 
supplemental statement, the net profit or loss on all commodity 
interests closed since the date of the previous statement; and
    (ii)(A) Maintain all books and records prepared in connection with 
its activities as a commodity pool operator for a period of five years 
from the date of preparation, and
    (B) Keep such books and records readily accessible during the first 
two years of the five-year period. All such books and records shall be 
open to inspection by any representative of the Commission or the United 
States Department of Justice.
    (c) Each person who applies for registration as a commodity pool 
operator must include with its initial application the financial 
statements and other information required by Sec. 4.22(c) (1) through 
(5) for each pool it operates when such application is made. That 
information must be presented and computed in accordance with generally 
accepted accounting principles consistently applied. If the person is 
granted registration as a commodity pool operator, it must comply with 
this part 4 with respect to each pool it operates. The provisions of 
this paragraph (c) shall apply even though such person was exempt from 
registration as a commodity pool operator pursuant to the provisions of 
paragraph (a) of this section at the time it applied for registration.
    (d) If a person exempt from registration under the Act as a 
commodity pool operator under paragraph (a)(1) or (a)(2) of this section 
registers as a commodity pool operator, that person must comply with 
this part 4 as if such person were not exempt from registration as a 
commodity pool operator.

(Approved by the Office of Management and Budget under control number 
3038-0005)

(Secs. 2(a)(1), 4c(a)-(d), 4d, 4f, 4g, 4k, 4m, 4n, 8a, 15 and 17, 
Commodity Exchange Act (7 U.S.C. 2, 4, 6c(a)-(d), 6f, 6g, 6k, 6m, 6n, 
12a, 19 and 21; 5 U.S.C. 552 and 552b))

[46 FR 26013, May 8, 1981, as amended at 46 FR 63035, Dec. 30, 1981; 47 
FR 57011, Dec. 22, 1982; 50 FR 15883, Apr. 23, 1985]