© CCH. All rights reserved. Originally published in the CCH Commodity Futures Law Reporter. Reposted by the CFTC with 

permission. Such reposting does not constitute or imply endorsement by the Commodity Futures Trading Commission of the 

accuracy of the reposted material or of any summaries thereof. 

1

Commodity Futures Archive - Selected materials, CFTC Interpretative Letter 

No. 76-5 (Registration Requirements Regarding Commodity Training 

Advisors)., ¶20,147, Commodity Futures Trading Commission, (Apr. 12, 1976)

¶20,147. Commodity Futures Trading Commission, Office of General Counsel. (Released April 12, 1976). 

Correspondence in full text.

Registration: Commodity Trading Advisors: Foreign and Domestic Commercial Customers: Exemptions: 

Customers Dealing Only in Spot and Forward Contracting Markets..– A metals dealer whose customers include 

only foreign and domestic commercial users may furnish foreign cash market information and recommendations to its 

domestic customers and domestic futures price information and recommendations to its foreign customers without 

registration as a commodity trading advisor, so long as the furnishing of such information is solely incidental to its 

business and those customers’ transactions are only in the spot and forward contracting markets.

See ¶4375, "Definitions" division; and ¶7625, "Registration" division.

Definitions: Commodity Trading Advisors: Exclusion from Definition: Cash Market Analyses: Intention to 

Predict Futures Prices May Be Inferred..– Analyses of cash market price movements on foreign or domestic markets 

may be intended to forecast or predict prices of commodities for future delivery on a contract market and as such may 

remove the analyst from the exclusion from the definition of commodity trading advisor provided in the proposed Reg. 

§1.54(a) of the CFTC for cash market information.

See ¶4375, "Definitions" division; and ¶7625, "Registration" division.

Registration: Commodity Trading Advisors: Foreign Customers Only: Jurisdiction of CFTC Based on 

Instrumentalities of Interstate Commerce..– According to the Office of General Counsel, a commodity trading 

advisor who supplies trading information and recommendations to only foreign customers through the jurisdictional 

instrumentalities of interstate commerce, is not exempt from registration as a commodity trading advisor.

See ¶7625, "Registration" division.

Re: Sections 2(a) (1) and 4m of the Commodity Exchange Act; Proposed Section 1.54(a) of the Regulations; 

Registration Requirements Regarding Commodity Trading Advisors

Dear ........................................................................................:

Reference is made to your letters to the Commission dated August 6 and November 17, 1975, requesting that the 

Commission's staff not recommend that any enforcement action be taken if your client engages in certain activities 

without registration as a commodity trading advisor under the Commodity Exchange Act, as amended (“Act”).

From your letters and from the conversations between you and a representative of your firm and the Commission's staff, 

we understand the facts to be as follows: Your client is a dealer in gold and silver bullion and other metals, whose 

customers include manufacturers, other large consumers, institutions and other dealers. Your client does not do business 

with the public generally and does not accept orders for futures contracts. Your client's transactions with its customers 

are either “spot” contracts or “forward” contracts for the physical metal. Your client's customers call upon it for their 

bullion or metal requirements and, through forward contracts, for their hedging needs.

Incidental to its business, your client furnishes the services described below to certain of its, customers for which it 

receives no compensation or other remuneration. As a service to its customers located outside the United States, all of 

whom are professional metal traders and users “Foreign Customers”), your client distributes historical, statistical 

information regarding the price of commodities for future delivery on United States contract markets (“Futures 

Statistics”), as well as comments which might be viewed as intended to encourage or discourage trading in commodities 

for future delivery on contract markets or to forecast or predict the price of such commodities (“Futures Substantive 

Comments”). As a service to certain of its customers located in the United States, your client distributes a chart setting 

forth the spot and forward bullion prices at the “fixings” in the London Silver Market and other cash markets located 

outside the United States, throughout the previous month (“Physical Commodity Statistics”), as well as substantive 

comments upon bullion cash price movements in such markets (“Physical Commodity Substantive Comments”). The 

Physical Commodity Substantive Comments include analyses, comments, recommendations, and, at times, predictions, 

with respect to the movement of bullion prices in foreign cash markets only, and do not include data with respect to the 

movement of prices in foreign futures markets, such as the London Metal Exchange. Your client furnishes the above 

services solely to its customers.
© CCH. All rights reserved. Originally published in the CCH Commodity Futures Law Reporter. Reposted by the CFTC with 

permission. Such reposting does not constitute or imply endorsement by the Commodity Futures Trading Commission of the 

accuracy of the reposted material or of any summaries thereof. 

2

Based upon the facts set forth above, particularly the fact that your client renders the services described above solely to, 

and in the course of its spot and forward transactions with, its customers, this Office will not recommend any 

enforcement action to the Commission, based solely on your client's failure to register with the Commission as a 

commodity trading advisor, if your client distributes Futures Statistics and Futures Substantive Comments to its Foreign 

Customers, and Physical Commodity Substantive Comments to its United States customers. Because this position is 

based upon the facts and representations contained in your letters and which you furnished to this Office, it should be 

noted that any different, omitted or changed facts or conditions might require a different conclusion.

There are, however, certain issues raised in your letter which we believe require comment. As pointed out in your letter 

of August 6, 1975, the Commission has published for comment proposed section 1.54(a) of the regulations, which 

would exclude a person from the definition of a commodity trading advisor contained in section 2(a)(1) of the Act if 

certain, specified conditions are met. Two of these conditions, set forth in paragraph (3) of proposed section 1.54(a), 

require that the services rendered by such person not be intended, directly or indirectly, to forecast or predict the price 

of any commodity for future delivery on any contract market, and do not contain any advice or suggestion which, in 

light of the circumstances in which such services are rendered, is intended to, or can be expected to encourage or 

discourage trading in any commodity for future delivery on any contract market. See, 40 Fed. Reg. 29090 (July 10, 

1975). We believe that, in certain circumstances, the furnishing of analyses, comments, recommendations or predictions 

with respect to the cash market, whether foreign or domestic, might well be intended to forecast or predict the price of a 

commodity for future delivery on a contract market or could contain advice or a suggestion which is intended or which 

can be expected to encourage or discourage futures trading in a commodity on a contract market. Accordingly, this 

Office does not believe that the rendering of such services, although limited to cash commodity price movements on 

foreign markets, will necessarily meet the conditions of proposed section 1.54(a) (3) of the regulations.

In your letter of August 6, 1975, you assert that neither “the Act nor its legislative history suggest that Congress 

intended the commodity trading advisor registration requirement to cover advice given solely to Foreign Customers” 

and that the “Commission should have no interest in the extension of its jurisdiction to Foreign Customers”. We wish to 

point out that section 4m of the Act requires any commodity trading advisor who makes use of the mails or any 

instrumentality of interstate commerce in connection with its business as a trading advisor to register with the 

Commission, unless exempted from registration as provided in that section. The language of section 4m and the absence 

of any contrary indication in the legislative history suggest that the commodity trading advisor registration requirements 

apply to any person who uses the jurisdictional means to render the advice described in section 2(a)(1) of the Act. Thus, 

the person over whom the Commission Would be exercising its jurisdiction would be the person Who uses the 

jurisdictional means to render advice, rather than the clients of such person. Accordingly, this Office is unable to agree 

with the general proposition that a commodity trading advisor who uses the requisite jurisdictional means to render 

trading advice solely to foreign persons is thereby exempt from the registration requirements of the Act regarding 

commodity trading advisors.