[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: 17CFR4.14] [Page 176-177] 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. 4.14 Exemption from registration as a commodity trading advisor. (a) A person is not required to register under the Act as a commodity trading advisor if: (1) It is a dealer, processor, broker, or seller in cash market transactions of any commodity (or product thereof) and the person's commodity trading advice is solely incidental to the conduct of its cash market business; (2) It is a non-profit, voluntary membership, trade association or farm organization and the person's commodity trading advice is solely incidental to the conduct of its business as such association or organization; (3) It is registered under the Act as an associated person and the person's commodity trading advice is issued solely in connection with its employment as an associated person; (4) It is registered under the Act as a commodity pool operator and the person's commodity trading advice is directed solely to, and for the sole use of, the pool or pools for which it is so registered; (5) It is exempt from registration as a commodity pool operator and the person's commodity trading advice is directed solely to, and for the sole use of, the pool or pools for which it is so exempt; [[Page 177]] (6) It is registered under the Act as an introducing broker and the person's trading advice is solely in connection with its business as an introducing broker; (7) It is registered under the Act as a leverage transaction merchant and the person's trading advice is solely in connection with its business as a leverage transaction merchant; (8) It is registered as an investment adviser under the Investment Advisers Act of 1940 or is excluded from the definition of the term ``investment adviser'' pursuant to the provisions of sections 202(a)(2) and 202(a)(11) of that Act; Provided, however, That: (i) The person's commodity interest trading advice: (A) Is directed solely to, and for the sole use of, entities which are excluded from the definition of the term ``pool'' under Sec. 4.5 or are qualifying entities under Sec. 4.5 for which a notice of eligibility has been filed; (B) Is solely incidental to its business of providing securities advice to each such entity; and (C) Employs only such strategies as are consistent with eligibility status under Sec. 4.5. (ii) The person is not otherwise holding itself out as a commodity trading advisor; and (iii) Prior to the date upon which such person intends to engage in business as a commodity trading advisor, the person files a notice of exemption with the Commission. (A) The notice must provide the name, main business address and main business telephone number of the person filing the notice. (B) The notice must represent that the person qualifies for exemption under this Sec. 4.14(a)(8) and that it will comply with the criteria of this section. (C) The notice shall be effective upon filing; Provided, however, That an exemption claimed hereunder shall cease to be effective upon any change which would render the representations made pursuant to paragraph (a)(8)(iii)(B) of this section inaccurate or the continuation of such representations false or misleading. (iv) In the event a person who has filed a notice of exemption under this paragraph (a)(8) subsequently becomes registered as a commodity trading advisory, the person must file a supplemental notice of that fact. (v) Any notice required to be filed hereunder must be: (A) In writing; (B) Signed by a duly authorized representative; and (C) Filed, along with a copy, with the Commission at the address specified in Sec. 4.2. (D) A copy also must be filed with the National Futures Association at its headquarters office (ATTN: Director of Compliance, Compliance Department); or (9) It does not engage in any of the following activities: (i) Directing client accounts; or (ii) Providing commodity trading advice based on, or tailored to, the commodity interest or cash market positions or other circumstances or characteristics of particular clients. (b) For purposes of this section, ``cash market transactions'' shall not include transactions involving contracts for the purchase or sale of a commodity for future delivery or transactions subject to Commission regulation under section 4c or 19 of the Act. (c) If a person exempt from registration under the Act as a commodity trading advisor under paragraph (a) of this section registers as a commodity trading advisor, that person must comply with this part 4 as if such person were not exempt from registration as a commodity trading advisor. (Secs. 8a(5) and 19 of the Commodity Exchange Act, as amended, 7 U.S.C. 12a(5) and 23 (1982); 5 U.S.C. 552 and 552b) [46 FR 26013, May 8, 1981; 46 FR 26761, May 15, 1981; 48 FR 35298, Aug. 3, 1983; 49 FR 5526, Feb. 13, 1984; 52 FR 41985, Nov 2, 1987; 52 FR 43827, Nov 16, 1987; 65 FR 12943, Mar. 10, 2000]