COMMODITY FUTURES TRADING COMMISSION 

2033 K STREET, N.W., WASHINGTON, D.C. 20581 

April 8, 1988 

Re: Registration of Foreign Associated Persons 

of a U.S . Corrm::xli ty Trading Advisor. 

Dear Mr. 

This is in response to your letter dated Fe.bruary 25, 1988, by which 

you sought our opinion on whether, as described ll'Ore fully below, the activities of certain foreign persons would require registration as an associated 

person ("AP") of a cam:rodity trading advisor· ("CTA") with the Corrmission. 

Based upon the representations you made in your letter we understand 

the facts to be as follows: "X" of which you serve as president is registered 

as aCTA. Another company in which you are a partner currently is involved 

in importing goods, ~· , minerals and chemicals, from Japan and Brazil. 

Through that other company you have come to make the acquaintance of various 

foreign businessmen, including "Y, 11 a Japanese citizen currently living in 

the United States but whose business takes him to Asia on a continuing basis, 

and "Z", a Brazilian citizen living in Sao Paulo, Brazil. "Y11 and "Z" have 

expressed an interest in 11 showing" "X" 's CTA Disclosure Document to their 

contacts in Asia and Brazil, respectively. By your letter you explain that 

neither 11Y11 nor "Z" would market "X"' s Disclosure Docurrent to United States 

citizens or to any individual residing in the United States. 1/ Rather, their 

activities would be conducted solely outside the United States and would be 

directed to non-United States citizens and residents. 

It appears that in showing the Disclosure Docurnent t..o their contacts 

Messrs. 11Y11 and 11 Z" vJould be soliciting discretionary accounts for Pollard 

and, as such, would be acting as an AP of aCTA as defined in Rule 1.3(aa) (4), 

17 C.F.R. §1.3(aa) (4) (1987). In this regard, Section 4k(3) of the Conrrcdity 

Exchange Act (the "Act"), 7 u.s.c. 6k(3) (1982), generally requires each AP 

of a CTA. to register as such with the Commission. 

In the Federal Register release accompanying the adoption of regulations on AP registration, the Commission a'Plained its position with respect 

to the registration of foreign APs of futures ccmnission merchants ( ~~ 

as follcvm ~ 

J:.j For the purpose of this letter the tenu "Uni-ted States" means the United 

Stat..es, its territories or possessions. 
Page 2 

The Commission and its staff have periodically 

received inquiries as to whether persons who are 

engaged in activities which would require registration if conducted in this country are nonethe--

less required to register if they confine their 

activities to areas outside the United States. 

The Corrmission has previously indicated with 

respect to the APs of [FC'Ms] that it believes 

that, given this agency's limited resources, it is 

appropriate at this time to focus [the Ccmnission' s] 

customer protection activities upon domestic firms 

and upon firms soliciting or accepting orders from 

domestic users of the futures markets and that the 

protection of foreign customers of firms confining 

their activities to areas outside this country, 

its territories and possessions may best be for 

local authorities in such areas. Any person who 

solicits or accepts from witlcin, or frcm any 

person residing within, the United States, its 

territories or possessions, or who supervises any 

person or persons so engaged, however, ~tTould be 

required to register .... 

. . . Affected persons should also be a\vare that 

the C(Jl'[[(jj_ssion view's advertising t.o be a fonn of 

solicitation, so that a person who employs any 

fonn of adve:r:tising medium which can reasonably be 

expected to reach persons residing within the 

United States, its territories or possessions 

will, absent some other e..xernption, be required to 

register in an appropriate capacity. 

48 Fed. Reg. 35248r 35261 (AUgL1St 3, 1983). 

We see no reason why the foregoing reasoning and relief should not be 

applied in the conte..'{t of dornestic erAs with respec-t to their foreign APs 

inasmuch as similar to the F~£ addressed in G~e Federal Register release, 

those persons are subject to registration, recordkeeping and other requirerrents under the Act and the Ccm:nission' s regulations. Accordingly, based 

upon the representations you have made to us, the Division will not recorrunend 

that the C(Jl'[[(jj_ssion take any enforcernent. action fer fililure to register as an 

AP of a erA against "Y" or "z., . 

We note that this letter: dces not excuse Messrs, "Y" c.nd 11 Z" from 

ccmpliance with any otl1er applicable requirements contained i11 the Act or in 

the Ccnmission' s regulc1.tions thereunder, For exarnple, each would rerrB.in 

subject_ to the anti-fraud provisions of Section 4~r of the Act, 7 U.S.C. 6o, 

(1982) 1 and to the reporting requireruentu for. t...raders set forth in Parts 15, 
Page 3 

18 and 19 of the Commission's re~1lations, 17 C.F.R. Parts 15, 18 and 19 

(1987) • 

The position taken in this letter is based up_;n the representations 

that you have made to us, as stated above. Any different, changed or omitted 

facts or conditions might require us to reach different conclusions. In this 

connection, we request that you notify us inmediately in the event the 

operations and activities of "X" or its foreign APs change in any way from 

that as represented to us. Finally, this position is that of the Division of 

Trading and Markets and does not necessarily represent the views of the 

Commission or any other office or division of the Commission. 

If you have any questions about this letter, please feel free to 

contact Barbara S . Gold, the Division' s Assistant Chief Counsel, at 

202/254-8955. 

Very t~-uly yours, 

Andrea M. Corcoran 

Director 

cc: Daniel A. Driscoll, National Futures Association