Commodity Trading Advisor CTA Definition, Requirements

If the commodity pool operator, the pool’s trading manager, any of the pool’s commodity trading advisors or any principal thereof trades or intends to trade commodity interests for its own account, the pool operator must disclose whether participants will be permitted to inspect the records of such person’s trades and any written policies related to such trading. (3) The Account Statement must also disclose any material business dealings between the pool, the pool’s operator, commodity trading advisor, futures commission merchant, retail foreign exchange dealer, swap dealer, or the principals thereof that previously have not been disclosed in the pool’s Disclosure Document or any amendment thereto, other Account Statements or Annual Reports. (h) Trading manager means, with respect to a pool, any person, other than the commodity pool operator of the pool, having sole or partial authority to allocate pool assets to commodity trading advisors or investee pools. (iii) A commodity pool operator that meets the conditions specified in § 4.22(d)(2)(i) to present and compute the pool’s financial statements contained in the Annual Report other than in accordance with generally accepted accounting principles, and has filed notice pursuant to § 4.22(d)(2)(iii), may also use the alternative accounting principles, standards or practices identified in that notice with respect to the computation and presentation of the account statement. Clients will know that their advisor is qualified, and has most likely passed a FINRA-administered exam.

A number of corporate and institutional investors allocate a portion of their portfolio to managed futures. The total amount of capital in managed futures programs is estimated to exceed $200 billion. After the account has started trading, Optimus monitors the account daily on behalf of the client. Your Optimus Futures advisor will receive a daily equity run detailing all your open positions, netting all profits and losses, and showing the exact daily balances in your account.

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Neither IASG nor any of its respective affiliates, officers, directors, agents and employees make any warranty, express or implied, of any kind whatsoever, and none of these parties shall be liable for any losses, damages, or costs, relating to the adequacy, accuracy or completeness of any information on this report. Pursuant to the Commodity Exchange Act (“CEA”), advisers who utilize futures contracts, options on futures or retail off-exchange forex contracts in their trading programs are generally required to register as a commodity pool operator (“CPO”) and/or commodity trading advisor (“CTA”), as appropriate, unless they qualify for an available exemption from registration. This article provides a general overview of the CPO/CTA registration process. Commodity pool operators and commodity trading advisors that are dually registered as investment advisers with the Securities and Exchange Commission, and that are required to file Form PF under the rules promulgated under the Investment Advisers Act of 1940, shall file Form PF with the Securities and Exchange Commission, in addition to filings made pursuant to paragraph (c)(1) of this section. Dually registered commodity pool operators and commodity trading advisors that file Form PF with the Securities and Exchange Commission will be deemed to have filed Form PF with the Commission, for purposes of any enforcement action regarding any false or misleading statement of material fact in Form PF.

(D) It will disclose in the pool’s Disclosure Document the location of its books and records that are required under this section. (B) Indicate to the pool operator that additional time is required to analyze the request, in which case the amount of time needed will be specified. (v) Be filed by a representative duly authorized to bind the pool operator. (B) The disclosure provided with respect to the offered pool complies with the provisions of the Investment Company Act of 1940, the Securities Act of 1933, the Securities Exchange Act of 1934, the regulations promulgated thereunder, and any guidance issued by the Securities and Exchange Commission or any division thereof.

Requirements

The methods described herein are illustrative of calculation methods the Commission has reviewed and determined may be appropriate to address potential material distortions in the computation of rate of return due to additions and withdrawals that occur during a performance reporting period. A commodity pool operator or commodity trading advisor may present to the Commission proposals regarding any alternative method of addressing the effect of additions and withdrawals on the rate of return computation, including documentation supporting the rationale for use of that alternate method. These financial statements must be presented and computed in accordance with generally accepted accounting principles consistently applied. The Account Statement must be signed in accordance with paragraph (h) of this section.

(3) Any exemption claimed hereunder shall cease to be effective upon any change which would cause the commodity pool operator of an exempt pool to be ineligible for the relief claimed with respect to such pool or which would cause a commodity trading advisor to be ineligible for the relief claimed. The pool operator or trading advisor must promptly file a notice advising the National Futures Association of such change. (d) If graphic, image or audio material is included in a document delivered to a prospective or existing client or pool participant, and such material cannot be reproduced in an electronic filing, a fair and accurate narrative description, tabular representation or transcript of the omitted material must be included in the filed version of the document. Inclusion of such material in a Disclosure Document shall be subject to the requirements of § 4.24(v) in the case of pool Disclosure Documents, and § 4.34(n) in the case of commodity trading advisor Disclosure Documents. A commodity trading advisor (CTA) has expertise in trading commodities and related instruments. Although a CTA can act much like a financial advisor, and some financial advisors may hold the designation, this designation is specific to advice related to commodities or futures trading.

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(ii) The person must make these disclosures by no later than the time it delivers a subscription agreement for the pool to a prospective participant in the pool. (iii) The registered pool operator of the pool is and will be liable for any violation of the Act or the Commission’s regulations by the person in connection with the person’s serving as a director or trustee with respect to the pool. (2) guides the client’s commodity interest trading by means of a systematic program that recommends specific transactions. (ii) Prior to any offer or sale of any participation in the exempt pool if the claimed relief includes that provided under paragraph (b)(1) commodities trading advisor of this section. (C) Either the net asset value per outstanding participation unit in the exempt pool as of the end of the reporting period, or the total value of the participant’s interest or share in the exempt pool as of the end of the reporting period. (xii) Except as provided for the governmental entities referenced in paragraph (a)(3)(iv) of this section, if otherwise authorized by law to engage in such transactions, a governmental entity (including the United States, a state, or a foreign government) or political subdivision thereof, or a multinational or supranational entity or an instrumentality, agency, or department of any of the foregoing.

• (2) The pool operator must include in the description of the business background of each person identified in § 4.24(f)(1) the name and main business of that person’s employers, business associations or business ventures and the nature of the duties performed by such person for such employers or in connection with such business associations or business ventures.
• This paper endeavors to re-introduce managed futures as a liquid, transparent hedge fund sub-style which actively trades a diversified mix of global futures markets.
• While one can argue that markets trends have been dominated by central banks’ actions, thereby limiting the potential of trends to develop, one can also argue that central bank policy has started several trends in risky assets.

(i) The commodity pool operator must, within 90 calendar days of the end of the pool’s fiscal year, file a notice with the National Futures Association, except as provided in paragraph (f)(2)(v) of this section. It shall be unlawful for any commodity pool operator, commodity trading advisor, principal thereof or person who solicits therefor to represent or imply in any manner whatsoever that such commodity pool operator or commodity trading advisor has been sponsored, recommended or approved, or that its abilities or qualifications have in any respect been passed upon, by the Commission, the Federal government or any agency thereof. Each person who has filed a notice of exemption from registration under this section must affirm on an annual basis the notice of exemption from registration, withdraw such exemption due to the cessation of activities requiring registration or exemption therefrom, or withdraw such exemption and apply for registration within 60 days of the calendar year end through National Futures Association’s electronic exemption filing system. If a claim for exemption has been made pursuant to this section, the commodity pool operator must make a statement to that effect on the cover page of each annual report. Each person who has filed a notice of exclusion under this section must affirm on an annual basis the notice of exemption from registration, withdraw such exemption due to the cessation of activities requiring registration or exemption therefrom, or withdraw such exemption and apply for registration within 60 days of the calendar year end through National Futures Association’s electronic exemption filing system.

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That information must be presented and computed in accordance with generally accepted accounting principles consistently applied. If the person is granted registration as a commodity pool operator, it must comply with the provisions of this part with respect to each such pool. (C) Regarding a pool that is a collective trust fund, the securities of which are exempt from registration pursuant to section 3(a)(2) of the Securities Act of 1933, any bank registered as a commodity pool operator that offers or sells participations in such a pool solely to qualified eligible persons, without marketing to the public, may claim any or all of the relief described in this paragraph (b) with respect to such pool. Trading commodity futures, options, and foreign exchange (“forex”) involves substantial risk of loss and is not suitable for all investors. In no way is the advisor of the month a direct recommendation of aiSource or any of its affiliates.

(ii) Accounts that differ materially with respect to rates of return may not be presented in the same composite. (iv) Any liquidity risks relative to the pool’s redemption capabilities. If the pool is not continuously offered, the closing date of the offering must be disclosed. Except as otherwise provided herein, a Disclosure Document must include the following information.

Unless otherwise specified, disclosure of the past performance of a pool must include the following information. Amounts shown must be net of any fees, expenses or allocations to the commodity pool operator. (vi) Any other person providing services to the pool, soliciting participants for the pool, acting as a counterparty to the pool’s retail forex or swap transactions, or acting as a swap dealer with respect to the pool. (6) If known, the futures commission merchant and/or retail foreign exchange dealer through which the pool will execute its trades, and, if applicable, the introducing broker through which the pool will introduce its trades to the futures commission merchant and/or retail foreign exchange dealer. (2) For the purpose of the Disclosure Document delivery requirement, including any offering memorandum delivered pursuant to § 4.7(b)(1) or 4.12(b)(2)(i), the term “prospective pool participant” does not include a commodity pool operated by a pool operator that is the same as, or that controls, is controlled by, or is under common control with, the pool operator of the offered pool.