CFTC CLARIFIES COMMODITY TRADING ADVISOR RULES
The U.S. Commodity Futures Trading
Commission (CFTC) released guidelines on how commodity trading
advisors (CTA) should calculate "beginning net asset value"
(BNAV) for purposes of computing rates of return required by
commission disclosure rules.
    The commission said it was compelled to release the
guidelines because it has received disclosure documents which
indicate "serious differences" in the way certain CTAs are
defining BNAW -- "differences that may have compromised the
ability to compare rates of return among different advisors."
    CFTC said CTAs must only use funds under their control or
in conjunction with their carrying futures commission merchants
in calculating BNAV.
    Computation of BNAV must exclude any item that is not
money, securities or other tangible property and any funds that
are not under the control of the CTA, or CTA in conjunction
with its carrying futures commission merchant.
    CFTC said "notational" funds must be excluded because they
are merely verbal promises to furnish funds.
    Funds in a commodity trading account over which a CTA has
discretionary trading authority must be included, CFTC said.
 Reuter
