In general, a no-action letter is a response from a government agency to another party regarding the legality of some action or event. No-action letters are relevant to different kinds of activities, and get sent from different kinds of regulatory agencies. The no-action letter is intended to assure the recipient that they will not be prosecuted, or otherwise penalized, for an action when the law is hazy on a particular point.
In finance, a no-action letter is usually sent from the U.S. Securities and Exchange Commission, the government agency that was set up to handle legal issues around the stock market and investing communities. In a no-action letter, the SEC basically states that their staff will not take any prosecutory or investigative action based on a stated intention that a private party may carry out. Other kinds of no-action letters carry a similar kind of implicit promise.
No-action letters are usually sent in direct response to a request. Parties request a no-action letter from a government agency when they think that the law is not clear enough, and that they may be prosecuted for something they want to do. Lawyers from all kinds of regulatory agencies can send a no-action letter to clarify a vague law.
Those who look at the need for this kind of legal response should understand that this kind of process represents all the unclear issues in American law. Even when laws have been drafted on a particular topic, there can be a lot of different legal interpretation. A no-action letter gets rid of a lot of the confusion, as it is a case by case statement from the likely prosecutor that a certain thing will not be penalized. The fact that so many parties send requests for a no action letter shows that lawyers have a good deal of leeway in many areas of the law to either make something vulnerable to prosecution or to protect it from prosecution.
A no-action letter must have a clear reference to an activity that an agency can look at to figure out whether they can issue this kind of legal response. Nearly any kind of private party may need to handle the creation of an inquiry for this kind of document to make sure they are covered before engaging in anything that seems potentially prosecutable. In-house staff or independent hired attorneys can write up a request for a no action letter that will give the sender peace of mind.