CFTC Issues No-Action Relief Concerning a CTA for the Subsidiary of a Registered CTA

The CFTC Division of Swap Dealer and Intermediary Oversight ("DSIO") issued a no-action letter permitting a CTA not to register with the CFTC as such where its advisory activities were conducted as subadvisor to its parent company that was itself a fully registered CTA. The relief was subject to various conditions, but the gist of the letter is essentially that the subsidiary was completely controlled by the parent and was in many respects an alter ego of the parent. In addition to the fact that the parent wholly owned the subsidiary, the letter noted that the parent and subsidiary were subject to the same code of ethics, and that they were carried on the same entity's payroll.

See: CFTC Letter 12-54: Section 4m(1) - CTA registration requirement.