Proposed Rule

2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | 1998 | 1997 | 1996

Resubmission of Proposed Amendments to NFA Compliance Rule 2-35 (additions to originally submitted text is underscored and deletions of originally submitted text is stricken)

COMPLIANCE RULES

* * *

Part 2 - RULES GOVERNING THE BUSINESS CONDUCT OF MEMBERS REGISTERED WITH THE COMMISSION

* * *

RULE 2-35. CPO/CTA DISCLOSURE DOCUMENTS.

* * *

(d) CPO Profile Document

(1) A Member CPO may deliver a profile document, as defined in paragraph (2) below, to a prospective participant prior to the delivery of a Disclosure Document, provided that the profile clearly states that an investment in the pool may not be made until after the prospective participant has received the Disclosure Document. A Member CPO shall not provide any advertising or other promotional materials with the profile unless it is also accompanied by the pool's Disclosure Document.

(2) A profile document shall not present information on more than one pool. A profile document shall include the following information, and only the following information, in the order indicated:

    (i) A cover page which contains the following information:

  • The following legend:

      This profile summarizes key information about the pool that is included in the pool's disclosure document. The disclosure document includes additional information about the pool, including a more detailed description of the risks associated with investing in the pool, that you should consider before you invest. Before accepting any funds or other property from you for investment in this pool, the operator of this pool is required to provide you with a copy of the pool's disclosure document and obtain a signed and dated acknowledgment from you indicating that you have received the pool's disclosure document. You may obtain the disclosure document and other information about the pool at no cost by contacting ________________ at _____________.

    • The name, main business address, main business telephone number and form of organization of the pool;

    • The name, main business address, main business telephone number and form of organization of the pool operator;

    • A statement identifying the document as a "profile" without using the term "disclosure document;"

  • The approximate date of the profile's first use;

  • A break-even analysis which includes a tabular presentation of all fees and expenses presented in a manner prescribed by NFA's Board of Directors;

      (ii) The following cautionary statement:

        Before investing in a commodity pool, you should carefully consider the following:

      • Futures and options trading can quickly lead to large losses as well as gains.

      • Trading losses can sharply reduce the net asset value of a pool and the value of your interest in the pool.

      • Some pools have restrictions on redemptions that may affect your ability to withdraw your investment in the pool.

      • Some pools are subject to substantial charges for management, advisory and brokerage fees. In order to cover these fees, the pool may have to experience substantial trading profits.

        This profile document does not provide all the information you need to evaluate your participation in this pool. You should carefully review the pool's disclosure document which contains detailed information on the pool's principal risk factors, the expenses that will be charged to the pool and a more detailed description of the break-even analysis for this pool.

        You should also be aware that neither the Commodity Futures Trading Commission nor the National Futures Association has passed upon the merits of participating in this pool nor the adequacy or accuracy of this profile.

      (iii) The identity of each principal of the pool operator, the pool's trading manager and its principals, if any, each major investee pool, the operator of the pool and its principals, and each major CTA and its principals (for natural persons, this should include name and title);

      (iv) A non-marketing oriented discussion of the trading strategy used to trade the pool;

      (v) (v) If applicable, A discussion of any additional risk factors not highlighted in the cautionary statement which are material unique to this particular pool;

      (vi) A discussion of any conflicts of interest which are material to the particular pool;

      (vii) A summary of any material administrative or criminal actions, whether pending or concluded, within five years of the date of the profile, against the commodity pool operator or any of its principals;

      (viii) A brief description of any restrictions on transfers of a participant's interest in the pool;

      (ix) A brief description of how a participant may redeem his interest in the pool and a statement of redemption charge, if any;

      (x) If applicable, a statement indicating the extent to which a participant may be held liable for obligations of the pool in excess of the funds contributed by the participant for the purchase of an interest in the pool;

      (xi) For pools with prior operating history, the capsule performance information for the offered pool as required by Commodity Futures Trading Commission Regulation 4.25(a)(1)(i), exclusive of the requirement of Regulation 4.25(a)(2). In addition, if applicable, notice to the prospective participant that the pool operator is required to report performance information on other pools operated by the pool operator in its Disclosure Document under CFTC Regulation 4.25 and the specific section in the Disclosure Document where this information may be found; and

      (xii) For pools with no operating history, a statement that the pool has no operating history and, if applicable, notice to the prospective participant that the pool operator is required to report performance information on other pools operated by the pool operator and performance information on major CTAs trading the pool in its Disclosure Document under CFTC Regulation 4.25 and the specific section in the Disclosure Document where this information may be found.

    (3) The profile document is subject to the filing requirements of CFTC Regulation 4.26. A particular pool's profile document must be filed with the disclosure document required under CFTC Regulation 4.21(a).

    (e) CTA Profile Document

    (eliminate entire section)

    (f) Filing Requirements for Profile Documents

    (eliminate entire section)

  • NFA is the premier independent provider of efficient and innovative regulatory programs that safeguard the integrity of the futures markets.
    Site Index | Contact NFA | News Center | FAQs | Career Opportunities | Industry Links | Home
    © National Futures Association All Rights Reserved. | Disclaimer and Privacy Policy