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CPO Disclosure Documents

  1. Does a CPO always have to file a pool disclosure document with NFA?
  2. What is a Qualified Eligible Person (QEP)?
  3. How does a CPO file a pool disclosure document?
  4. How often must the CPO update the pool disclosure document?
  5. How long does NFA take to review a pool disclosure document?
  6. What information must be included in a pool disclosure document?
  7. What is Instant Filing treatment of a pool disclosure document?
  8. When is a pool disclosure document eligible for Instant Filing?
  9. Can the CPO include the pool's disclosure document on the firm's website?
  10. What accounting method should a CPO use to calculate the pool performance information included in the pool disclosure document?
  11. Can hypothetical performance information be included in the pool disclosure document?
  12. What is a Statement of Additional Information (SAI)?
  13. How does a pool disclosure document comply with plain English principles?
  14. What is a break-even analysis?

1. Does a CPO always have to file a pool disclosure document with NFA?

No. A registered CPO that is required to provide a disclosure document must file it with NFA, but some pools are exempt from the requirement. For example, a disclosure document is not required for a pool that is sold solely to qualified eligible persons if it meets the requirements for an exemption under CFTC Regulation 4.7. If a disclosure document is required, it cannot be used until it is reviewed and accepted by NFA. 

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Does a CPO always have to file a pool disclosure document with NFA?

2. What is a Qualified Eligible Person (QEP)?

A QEP is a sophisticated person who participates in a commodity pool or opens a managed account. The categories of persons who qualify as QEPs are listed in CFTC Regulation 4.7(a).

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What is a Qualified Eligible Person (QEP)?

3. How does a CPO file a pool disclosure document?

A CPO must file a pool disclosure document through NFA's online Disclosure Document System. Only individuals authorized by the firm have access to the Disclosure Document System. To file a disclosure document or learn how to become authorized, go to Electronic Filings.

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How does a CPO file a pool disclosure document?

4. How often must the CPO update the pool disclosure document?

If the firm is soliciting for new pool participants, the pool disclosure document must be updated at least every twelve (12) months. However, a CPO may be required to update the pool disclosure document more often if there are any material changes that must be disclosed.

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How often must the CPO update the pool disclosure document?

5. How long does NFA take to review a pool disclosure document?

Review times vary depending on whether it is an initial or updated filing, the disclosure document size, and other factors. In general, NFA reviews most disclosure documents within 14 days of receipt.

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How long does NFA take to review a pool disclosure document?

6. What information must be included in a pool disclosure document?

The pool disclosure document must comply with the CFTC Part 4 Regulations. Review NFA's Disclosure Document Guide for an outline of the required information.

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What information must be included in a pool disclosure document?

7. What is Instant Filing treatment of a pool disclosure document?

If certain conditions are met, a pool disclosure document may be eligible for Instant Filing treatment. A pool disclosure document that qualifies for Instant Filing treatment is generally reviewed within three (3) business days. NFA staff will respond to a Member via electronic mail with either a comment letter or an acceptance letter. Review the CFTC's Instant Filing Notice for further guidance.

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What is Instant Filing treatment of a pool disclosure document?

8. When is a pool disclosure document eligible for Instant Filing?

A pool disclosure document may be eligible for Instant Filing treatment if a previously accepted pool disclosure document is on file with NFA, the pool disclosure document contains no material changes, and the firm requests Instant Filing treatment. Review the CFTC's Instant Filing Notice for further guidance.

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When is a pool disclosure document eligible for Instant Filing?

9. Can the CPO include the pool's disclosure document on the firm's website?

NFA Rules and CFTC Regulations do not prohibit CPOs from including pool disclosure documents on their websites. However, if a privately offered commodity pool is exempt from SEC Registration, the CPO should check with the SEC to ensure that this would not violate the exemption.

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Can the CPO include the pool's disclosure document on the firm's website?

10. What accounting method should a CPO use to calculate the pool performance information included in the pool disclosure document?

CFTC Part 4 Regulations indicate that performance must be calculated on an accrual basis of accounting in accordance with generally accepted accounting principles. Review NFA's Disclosure Document Guide for additional guidance.

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What accounting method should a CPO use to calculate the pool performance information included in the pool disclosure document?

11. Can hypothetical performance information be included in the pool disclosure document?

Hypothetical performance information may be included in the pool disclosure document if certain conditions are met. Review NFA Compliance Rule 2-29(c) and the Interpretive Notice at 9025 for specific guidance.

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Can hypothetical performance information be included in the pool disclosure document?

12. What is a Statement of Additional Information (SAI)?

A pool disclosure document can only include information required by CFTC, SEC and state authorities. Any other information the CPO wants to provide must be included in a Statement of Additional Information. Review NFA Compliance Rule 2-35 and the Interpretive Notice 9035 for specific guidance on preparing an SAI.

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What is a Statement of Additional Information (SAI)?

13. How does a pool disclosure document comply with plain English principles?

In general, pool disclosure documents should be no more than 30 pages long, be written in easy to understand language, and avoid the use of legal jargon when possible. Pool disclosure documents that are more complex may be slightly longer. Review the Interpretive Notice 9035 and NFA's Disclosure Document Guide for more guidance.

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How does a pool disclosure document comply with plain English principles?

14. What is a break-even analysis?

A break-even analysis is a tabular presentation of the impact that fees and expenses have on the potential profitability of an investment. This information must be disclosed in the pool disclosure document. Review the Interpretive Notice 9023 and NFA's Disclosure Document Guide for guidance.

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What is a break-even analysis?
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