S3 1.7

Question 1

What is a CTA and how does he earn?

Answer 1

Advices on trading futures and options futures; may also manage client accounts

Question 2

What does a CTA Disclosure doc include?

Answer 2

1) Background of principals
2) Proposed trading strategies
3) CTA performance record
4) potential conflict of interest

Question 3

Does CTA need disclose fees received from clients? If so, where?

Answer 3

Yes -as a footnote on CTA Disclosure

Question 4

Is OK for CTA to collect client funds in his name?

Answer 4

No, unless registered as FCM. Even if CTA registered as IA or Registered rep, can only receive funds if a reg FCM

Question 5

Is OK for CTA to share commissions?

Answer 5

Yes, if disclosed to clients

Question 6

May CTA use automatic system for investments?

Answer 6

No! Unless fully disclosed

Question 7

When does a CTA not need to be registered?

Answer 7

1) no advising activity in last 12 months and 2) less than 15 clients