For Release: July 15, 2003
CFTC ADOPTS CORE PRINCIPLE FOR CTAs’ PRESENTATION OF PERFORMANCE OF PARTIALLY FUNDED ACCOUNTS
WASHINGTON, D.C. – Commodity Trading Advisors (CTAs) will be able to present the past performance of their partially funded client accounts in a manner consistent with a core principle adopted by the Commodity Futures Trading Commission (CFTC).
The core principle specifies that a CTA may present the performance of partially funded accounts in a manner that is balanced and is not in violation of the Commission’s antifraud provisions. In adopting this rule, the Commission stated that the core principle would not preclude the development of more specific guidance, by self-regulatory organizations or others. The Commission also confirmed that CTAs following the specific rules it proposed in March 2003 would be in compliance with the core principle.
The CFTC is advancing the aim of the Commodity Futures Modernization Act of 2000 (CFMA) by replacing standardized, detailed requirements for intermediaries, when appropriate, with a core principle approach that allows for greater flexibility, creativity, and innovation.
“The Commission today validates the principle of presenting past performance of partially funded accounts in a way that ensures customer protection while allowing for the flexibility needed to respond to evolving industry developments and practices,” said Chairman James E. Newsome.
The rules are being published in the Federal Register and will be in effect 30 days after publication. Copies of the rule can be obtained by contacting the Office of the Secretariat, Three Lafayette Centre, 1155, 21st Street, N.W., Washington, DC 20581, (202) 418-5100 or by accessing the Commodity Futures Trading Commission website at www. cftc.gov.