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CTA Disclosure Documents

  1. Does a CTA always have to file a disclosure document with NFA?
  2. What is a Qualified Eligible Person (QEP)?
  3. How does a CTA file a disclosure document?
  4. How often must the CTA file the disclosure document?
  5. How long does NFA take to review a CTA disclosure document?
  6. What information must be included in a CTA disclosure document?
  7. What is Instant Filing treatment of a CTA disclosure document?
  8. When is a CTA disclosure document eligible for Instant Filing?
  9. Does the CTA disclosure document have to be included in the firm's website?
  10. What accounting method should a CTA use to calculate the performance information included in the CTA disclosure document?
  11. Can hypothetical performance information be included in the CTA disclosure document?
  12. What are notional funds?

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

Not necessarily. A registered CTA that is required to provide a disclosure document must file it with NFA, but an exemption may apply. For example, a disclosure document is not required for a CTA that offers it's services 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 CTA always have to file a 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 CTA file a disclosure document?

A CTA must file its 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 CTA file a disclosure document?

4. How often must the CTA file the disclosure document?

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

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How often must the CTA file the disclosure document?

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

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

The CTA 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 CTA disclosure document?

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

If certain conditions are met, a CTA disclosure document may be eligible for Instant Filing treatment. A CTA 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 CTA disclosure document?

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

A CTA disclosure document may be eligible for Instant Filing treatment if a previously accepted CTA disclosure document is on file for the same program at NFA, the CTA 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 CTA disclosure document eligible for Instant Filing?

9. Does the CTA disclosure document have to be included in the firm's website?

Although the Member is not required to provide the CTA disclosure document on its website, the CTA disclosure document does provide a potential client with a general overview of the firm's business and the risks involved with the CTA's trading program.

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Does the CTA disclosure document have to be included in the firm's website?

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

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

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

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

12. What are notional funds?

An account is notionally funded when the client directs the CTA to trade the account as if the funding amount was higher than the actual funds on deposit in the client's account. This does not, however, mean that the account may trade undermargined. Notional funding is allowed as long as certain criteria are met, including having a written agreement in place between the firm and the client. Review NFA Compliance Rule 2-34 and the Interpretive Notice 9054 for more guidance.

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What are notional funds?
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