[Title 17 CFR 4.14]
[Code of Federal Regulations (annual edition) - April 1, 2003 Edition]
[Title 17 - COMMODITY AND SECURITIES EXCHANGES]
[Chapter I - COMMODITY FUTURES TRADING COMMISSION]
[Part 4 - COMMODITY POOL OPERATORS AND COMMODITY TRADING ADVISORS]
[Subpart A - General Provisions, Definitions and Exemptions]
[Sec. 4.14 - Exemption from registration as a commodity trading advisor.]
[From the U.S. Government Printing Office]


17COMMODITY AND SECURITIES EXCHANGES12003-04-012003-04-01false4.14Sec. 4.14COMMODITY AND SECURITIES EXCHANGESCOMMODITY FUTURES TRADING COMMISSIONCOMMODITY POOL OPERATORS AND COMMODITY TRADING ADVISORSGeneral 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;

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    (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;
    (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 National Futures Association.
    (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 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; 67 FR 77411, Dec. 18, 
2002]

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