(3) The pool operator may not use the Disclosure Document or profile document until such correction has been made. (i) Unless such presentation would be misleading, past performance of accounts required to be presented under this section may be presented in composite form on a program-by-program basis using the format set forth in § 4.25(a)(1)(ii). (3) Disclose, in the break-even analysis required by § 4.24(i)(6), the costs of purchasing and carrying the assets to fund the principal protection feature or other limitation on risk, expressed as a percentage of the price of a unit of participation.

It created the Commodity Futures Trading Commission (CFTC) and marked the first use of the term commodity trading advisor (CTA). CTA Performance has been challenging over the last decade and investors have debated the beneficial characteristics of CTAs and trend followers at length. 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. Investors need to carefully judge the investment program, where past performance has not been indicative of future results but where research-oriented efforts have been a clear focus for managers trying to raise assets and outcompete other futures managers. That said, most investors evaluate CTA based on past performance using a variety of different techniques.

Commodity trading advisor

(B) Pools of different classes or pools with materially different rates of return may not be presented in the same composite. (i) Performance data for pools of the same class as the offered pool must be presented following the performance of the offered pool, on a pool-by-pool basis. (iii) If assets deposited by the pool as margin or as security deposit generate income, to whom that income will be paid. (ii) the date of the Statement of Financial Condition required by paragraph (a)(10) of this section. The Statement must be completed within 30 days after the end of that period.

(1) The Disclosure Document must include a complete description of each fee, commission and other expense which the commodity pool operator knows or should know has been incurred by the pool for its preceding fiscal year and is expected to be incurred by the pool in its current fiscal year, including fees or other expenses incurred in connection with the pool’s participation in investee pools and funds. (B) At the time of filing the Annual Report with the National Futures Association, certifies that it has received a written waiver from each participant from whom it is required to obtain a waiver to qualify for the relief available under this paragraph (c)(7). The commodity pool operator must maintain the waivers in accordance with § 4.23 and must make the waivers available to the Commission or National Futures Association upon request. Notwithstanding the provisions of paragraph (g)(2)(ii) of this section, the relief made available by this paragraph (c)(7)(iii) will not be available where the commodity pool operator has not previously distributed an audited Annual Report to pool participants and submitted an audited Annual Report to the National Futures Association. (E) Each person who has filed a notice of exemption from registration under this section must, in the event that any of the information contained or representations made in the notice becomes inaccurate or incomplete, amend the notice electronically through National Futures Association’s electronic exemption filing system as may be necessary to render the notice accurate and complete. This amendment must be filed within 15 business days after the trading advisor becomes aware of the occurrence of such event.

Requirements

(i) The claim of exemption must be filed before the date the commodity pool first enters into a commodity interest transaction. (2) A transaction made in reliance on § 4.7 must comply with all applicable terms, conditions and requirements of § 4.7. Where an exemption is established only through reliance upon paragraph (e)(1) of this section, the failure to comply shall nonetheless be actionable by the Commission.

(B) Where the claimant is a commodity trading advisor, be received by the Commission before the date the trading advisor first enters into an agreement to direct or guide the commodity interest account of a qualified eligible person pursuant to § 4.7. A disclosure document is a description of the CTA’s trading program and procedures that apply to accounts under the CTA’s control. The document is required by the NFA and CFTC and describes the fees, trading program, procedures for entry and exit, past performance and rules for the overall trading program.

Managed Futures FAQ

(1) The Commission may exempt any person or any class or classes of persons from any provision of this part 4 if it finds that the exemption is not contrary to the public interest and the purposes of the provisions from which the exemption is sought. (k) commodities trading advisor Draw-down means losses experienced by a pool or account over a specified period. (1) Principal, when referring to a person that is a principal of a particular entity, shall have the same meaning as the term “principal” under § 3.1(a) of this chapter.

Those books and records must include, as applicable, books and records of the type specified in paragraphs (a)(1) through (a)(7) of this section and in paragraphs (a)(1) through (a)(8) of § 4.23. (i) The commodity pool operator must disclose the perfor- mance of any accounts (including pools) directed by a major commodity trading advisor in accordance with paragraphs (a)(1)(ii) (C) through (G) of this § 4.25. (2) For at least such three-year period, seventy-five percent or more of the contributions to the pool were made by persons unaffiliated with the commodity pool operator, the trading manager (if any), the pool’s commodity trading advisors, or the principals of any of the foregoing.