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Notice I-03-09

July 24, 2003

Guidance for the Presentation of Performance Data and Disclosure for Commodity Trading Advisors

On July 21, 2003, the Commodity Futures Trading Commission ("CFTC") adopted a new Rule 4.35(a)(7), which establishes a core principle for the performance disclosure of partially funded accounts by commodity trading advisors ("CTAs"). The CFTC's core principle specifies that such performance disclosure must be presented in a manner that is balanced and does not violate the antifraud provisions of the Commodity Exchange Act. The broad oversight approach taken by the CFTC in this newly adopted rule is in marked contrast to the explicit guidelines the CFTC proposed in a March 13, 2003 release.

NFA is developing more specific guidelines to assist our Members in complying with this newly adopted core principle. NFA anticipates that this guidance will be provided through a new rule that will be adopted by year-end or shortly thereafter. In the interim, Member CTAs may continue to utilize one of the two currently acceptable methods of performance presentation, namely the fully-funded subset method or the actual funds method. Alternatively, a Member CTA may choose to use the nominal account size for calculating performance results, in which case the CTA should follow the requirements outlined in the CFTC's March 13, 2003 rule proposal ensureto ensure compliance with the newly adopted core principle.

If a CTA wishes to use a different method for presenting its performance data, we encourage you to consult with NFA for guidance. Regardless of the method selected, Members should ensure that the presentation is balanced and not misleading.

If you have any questions, please contact one of the individuals listed below.

Mary McHenry, Senior Manager, Compliance
(312) 781-2237

Patricia Cushing, Associate Director, Compliance
(312) 658-6747

Kathryn Camp, Associate General Counsel
(312) 781-1393

You can obtain a copy of the Marchthe March 13, 2003 rule proposal at the CFTC's website through this link

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