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CTA Expo Program in New York 2012

The CTA Expo is probably the best series of events for CTAs in the United States (and now in London) and the New York event is coming up soon. The managed futures industry will be in New York on April 18th for the NIBA Conference event and on April 19th for the CTA Expo. Both events will be at the NYMEX building. As we have for the last few years, Cole-Frieman & Mallon will be a sponsor of the NIBA event and will be attending the expo on the next day. We look forward to seeing everybody there.

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April 18, 2012

4:30 – 6:00 Joint NIBA/CTAEXPO Cocktail Party, Sponsored by Telvent DTN

April 19, 2012

8:30 – 9:30 Continental Breakfast

Sponsored by DMAXX

9:15 – 9:30 Welcoming Remarks

Bucky Isaacson and Frank Pusateri

9:30 – 10:00 An Insider’s View of Marketing

Elaine Llyod | Axion Services Group

Sponsored by BNY Mellon

10:00 – 10:30 How Family Offices Select Managers

Audie Apple | Bessemer Trust

Sponsored by Horizon Cash Management

10:30 – 11:00 Coffee Break

Sponsored by Credit Suisse

11:00 – 11:30 Marketing in Latin America

Todd Scanlon | Bank of America Merrill Lynch

11:30 – 12:15 KEYNOTE SPEAKER

Bob Swarup | PIC

Sponsored by Trading Technologies

12:15 – 1:15 Lunch

Sponsored by ICE

1:15 – 2:00 KEYNOTE SPEAKER

Chuck Johnson | Tano Capital

Sponsored by Eurex

2:00 – 2:30 Marketing in Asia

Ilsoo Moon | Quark Capital

Sponsored by Dorman Trading

2:30 – 3:00 Compliance Issues in Today’s Regulatory Environment

Kate Dressel | Strategic Compliance Solutions LLC

David Matteson | Drinker Biddle & Reath LLP

Sponsored by Symphono

3:00 – 3:30 Coffee Break

Sponsored by Patsystems

3:30 – 4:00 Press Panel

Ron Weiner | RDM Inc.

Sandra Smith | FOX Business Network

Moderator: John Conolly | CME Group

Sponsored by Gemini Fund Services

4:00 – 4:30 The Psychology of Successful Trading

Denise Schull | Trader Psyches

Sponsored by Investor Analytics

4:30 – 6:00 Closing Cocktail Party

Sponsored by NYSE Liffe US and NYSE Liffe

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Cole-Frieman & Mallon LLP provides legal and compliance support to CTAs and CPOs. Please feel free to contact us directly or reach out to Bart Mallon at 415-868-5345.

 

CTA Expo 2011 Chicago

Ronnie Lott Keynote Speaker at CTA Conference

We are gearing up for the CTA Expo in Chicago next month. The CTA Expo, which is also held in New York and London, has become the go-to event for CTAs and others member of the managed futures industry. As always, the NIBA will be having its own conference the day before the CTA Expo and there will be a joint NIBA/CTA Cocktail Party.

The NIBA event will be September 12, 2011 and the agenda includes:

  • Rules, Regulations, Revenue: Round III with Moderator Steve Pherson from Schuyler Roche
  • Grow Your Business by Hiring the Right People by Pat Lunkes of Parkway Consulting Group
  • Marketing Strategy Makeover by Candyce Edelen & Phil Donaldson of Propel Growth
  • A Bubble in Commodities: What to Look for by Darin Newsom of Telvent DTN
  • Anatomy of an Online Marketing Campaign: Generating Leads Online by Shane Stiles of Gate 39 Media

The CTA Expo will be September 13, 2011 and the  agenda includes:

  • Welcoming Remarks by Bucky Isaacson and Frank Pusateri
  • Maximizing the Value of your Conference Attendance by Ron Suber of Merlin Securities
  • Successful Marketing in Asia by Rumi Morales of the CME Group
  • Reputation – Creating Power Through Personal Branding by Lida Citroen
  • Keynote Speach by Ronnie Lott of All Stars Helping Kids<

    /a> – Professional Sports and Business – Lessons Learned

  • Marketing Managed Futures in Europe –

    Tips from the Trenches by Simon Rostron of Rostron Parry

  • The Regulatory Environment in 2011 and Beyond by Dan Driscoll of the National Futures Association
  • The Role of Emerging Managers in a Portfolio by Joseph Schlater of Busara Advisors
  • Institutional Investors and What They Look For in a Manager by Keith Palzer of Bank of America Merrill Lynch
  • The Marketing Impact of a Professional Back Office by Dana Comolli of DMAXX
  • Promoting Managed Futures as an Investment by Mark Melin of High Performance Managed Futures

Cole-Frieman & Mallon LLP has been a sponsor of the CTA Expo since 2009 and this year we will be introducing Ron Suber of Merlin Securities on Tuesday morning.  For more information on the events, please see the CTA Expo program and NIBA Conference schedule.

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Cole-Frieman & Mallon LLP provides legal advice to CTAs and CPOs, including NFA compliance and regulatory guidance.  For more information, please see our CTA and CPO Registration and Compliance Guide or call Bart Mallon directly at 415-868-5345.

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Managed Futures Industry Conference & Networking Event

NIBA Conference / CTA Expo 2011 – New York, April 20-21

The NIBA and the CTA Expo are having their New York event this week.  Both events have a number of good sponsors and speakers and provide members of the managed futures industry with a great opportunity to network.  Bart Mallon of Mallon P.C. will be a speaking at the NIBA event on a panel entitled “Rules, Regulations and Your Revenue” which is expected to touch on a number of important legal and compliance issues.  For more information, please see the CTA Expo website and the NIBA website.

The agendas for both events are reprinted below.  We look forward to seeing you in New York.

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NIBA 2011 IB/CTA Spring Conference
New York City, April 20, 2011
NYMEX Building CME Group, 1pm-4:30pm

Compliance, Marketing and Technology–all concepts integral to your Brokerage or CTA. Register to attend the largest independent conference for Introducing Brokers, CTAs and futures industry professionals. Complete agenda below and at www.theniba.com

Rules, Regulations and Your Revenue
Panel Discussion

Moderator: Steve Pherson | Schuyler, Roche, & Crisham P.C.

PANELISTS:

  • Bart Mallon | Bart Mallon, PC
  • Mark Ruddy | Ruddy Law Office PLLC
  • Sharon Pendleton | Director, Compliance of NFA

Whether you trade traditional futures and options, forex or swaps and derivatives, you will not want to miss this session. Topics:

  • CFTC Porposals that will affect your business
  • NFA Rules you need to know about
  • Understanding Dodd-Frank
  • Commissioner's response to your suggestions for the CFTC

Got Leads?
Panel Discussion

  • Candyce Edelen | CEO of PropelGrowth
  • Rodney Dow | President, The Dow Corporation
  • Laurie Gavin | Sr. Manager, Compliance of NFA

Candyce is a leading speaker on the subject of attracting and nurturing leads. Rodney will share ideas his IIB uses to cultivate relationships with both new and existing clients. And Laurie will tell us how to stay in compliance with NFA regulations while you're building your client base. You will leave this session with actionable ideas you can use as soon as you get back to your office!

Online Marketing: How You Can Improve Your Website Now

  • Shane Stiles | President of gate39media

Drive traffic to your website, capture more leads, utilize social media, and cost effective tips you can do to improve the performance of your website today. Tips for both IBs and CTAs alike.

Joint NIBA/CTA EXPO Networking and Cocktail Reception
Network with contacts old and new with your peers i

n the futures industry! This networking event will be held in conjunction with CTA EXPO participants

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CTA EXPO New York
April 21, 2011 Program

8:30-9:30 Continental Breakfast

  • Sponsored by: DMAXX

9:15-9:30 Welcoming Remarks-

  • Frank Pusateri and Bucky Isaacson
  • Sponsored by: Strategic Compliance Solutions

9:30-10:00 Monitoring Portfolio Exposure, Key Risk Metrices, and Manager Mandates-

  • James Goldcamp | HedgeFacts LLP

10:00-10:30 A Marketing Plan for Managers-

  • Ron Suber | Senior Partner, Head of Global Sales and Marketing, Merlin Securities
  • Sponsored by: Arthur Bell CPAs

10:30-11:00 Coffee Break Sponsored by: National Eagles and Angels

11:00-11:30 Manager Seeding-

  • Daniel J. Barnett | CEO, Revere Capital Advisors
  • Sponsored by: Dorman Trading

11:30-12:30 Adding Value Through L/S Commodity Investing-

  • Moderator: Ray McKenzie | ICE Futures US
  • Mike Dubin | Managing Director, Silvercrest Asset Management
  • Toby Elliman | Managing Partner, Guidance Capital LLC

12:30-1:30 Lunch

  • Sponsored by: ICE

1:15-2:00 (KEYNOTE) The Capital Markets, U.S. Policy, and the Future of Innovation-

  • The Honorable Robert Grady | Chair of the New Jersey Council of Economic Advisors; Chair of the State of New Jersey Investment Council, Division of Investment; Managing Director of Cheyenne Capital
  • Sponsored by: Trading Technologies

2:00-2:30 Institutional Marketing in Europe-

  • Cecilia Mortimore de Santa Cruz | Director of Capital Services, Credit Suisse Securities LLC
  • Sponsored by: Michael Coglianese CPA, P.C.

2:30-3:00 The Regulatory Environment in 2011-

  • Daniel J. Roth | President and CEO, National Futures Association
  • Sponsored by Telluride Asset Management LLC

3:00-3:45 Coffee Break

  • Sponsored by Bank of America Merrill Lynch

3:45-4:30 The Lessons Learned from Madoff-

  • Mike Ocrant | Director, Alternative Investment Conferences, Conference Group, Institutional Investor
  • Co-Author of No One Would Listen
  • Sponsored by: Horizon Cash Management

4:30-5:00 Protecting Your Intellectual Property-

  • Alex Montagu | Montagu Law, P.C.
  • Sponsored by: TraderView

6:00-8:00 Closing Cocktail Party- NYSE Trading Floor

  • Sponsored by NYSE Liffe U.S. and NYSE Liffe

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Cole-Frieman & Mallon LLP provides legal and compliance services to the managed futures industry.  Bart Mallon can be reached directly at 415-868-5345.

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CTA Expo 2010 | November 3, 2010

Bart Mallon Speaking at Chicago CTA buy anabolic steroids Expo

This year’s Chicago CTA Expo will again be held the same week as the FIA Expo and it will be a day after the NIBA Sales and Marketing Conference.  Bart Mallon of Mallon P.C. will be a speaker at the event.  The full line up of speakers can be found below.

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CTA EXPO 2010, for the first time, had conferences in New York, April 21 and now Chicago, November 3.  CTA EXPO Chicago will continue to focus on the needs of the CTA community.

November 2, 2010

  • 4:30 – 6:00 – Joint NIBA/CTA EXPO Cocktail Party (Sponsored by Telvent DTN)

November 3, 2010

  • 8:00 – 9:00 – Continental Breakfast (Sponsored by DMAXX)
  • 8:45 – 9:00 – Welcoming Remarks (Sponsored by Barclay Hedge Ltd.)
    • Frank Pusateri (Adriondack Portfolio Management, Inc)
    • Bucky Isaacson (Future Funding Consultants)
  • 9:00 – 9:30 – Marketing in Europe (Sponsored by Horizon Cash Management, LLC)
    • Cecilia Mortimore (Credit-Suisse Securities (USA) LLC)
  • 9:30 – 10:00 – Institutional Marketing (Sponsored by Mallon P.C.)
    • Laurie Posner (PNC Capital Advisors)
  • 10:00 – 10:30 – Coffee Break (Sponsored by Firm 58)
  • 10:30 – 11:00Manager Selection and Portfolio Creation at a Fund of Funds (Sponsored by Ruddy Law Office, PLLC)
    • Speaker To Be Confirmed (The Kenmar Group)
  • 11:00 – 12:00Innovations in Investment Products and Marketing Exchange Traded Funds (Sponsored by Michael Coglianese CPA, PC)
    • Tim Pickering (Auspice Capital Advisors Ltd)
  • 11:00 – 12:00 – Product Structuring and Marketing to The Broker Dealer Community (Sponsored by Michael Coglianese CPA, PC)
    • Michael Tannenbaum (Tannenbaum Helpern Syracuse and Hirschtritt)
    • Others: To Be Confirmed
    • Moderator: Mark Omens (CME Group)
  • 12:00 – 12:45 – Lunch (Sponsored by ICE)
  • 12:45 – 1:30 – Keynote Speaker (Sponsored by Dorman Trading)
    • Suk Kim (Samsung Asset Management Company LTD)
  • 1:30 – 2:00Marketing Emerging CTAs (Sponsored by eSignal)
    • Brad Cole (Cole Partners)
  • 2:00 – 2:30Generate a Positive Impact with Your Marketing Materials (Sponsored by TraderView)
    • Kristin Fox (FoxInspires LLC)
  • 2:30 – 3:00 – Coffee Break
  • 3:00 – 3:30 – Internet Social Networking (Sponsored by Arthur Bell, Certified Public Accountants)
    • Bart Mallon (Mallon P.C.)
  • 3:30 – 4:00Internet Publishing and Marketing (Sponsored by CCS Financial Services, Inc.)
    • John Lothian (John Lothian Newsletter)
  • 4:00 – 4:30Managed Futures – Yesterday and Today (Sponsored by Woodfield Fund Administration LLC)
    • Leon and Joy Rose
  • 4:30 – 6:00Cocktail Party

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Other related hedge fund law articles:

Cole-Frieman & Mallon LLP provides CTA registration and compliance services.  Bart Mallon, Esq. can be reached directly at 415-868-5345.

CTA Lead List Basics

By Bart Mallon, Esq. (www.colefrieman.com)

“Purchased Lead Lists and How to Use Them”

A good resource for CTAs that are actively trying to raise money are lead lists – lists of names and contact information of potential future clients or investors.  This overview is for the CTA Expo 2009 program entitled Purchased Lead Lists and How to Use Them.  The program was sponsored by Patke & Associates and featured Jacques DeRouen of Pinnacle Alternative Investments.

Jacques started off by telling all of the CTAs that they need to get out and market to investors.  The point is to get your story to willing listening.  He then provided us with a brief background of how he got involved with lists and how he learned to use lists effectively.  The biggest takeaway is that getting good at using lead lists takes time and dedication – but don’t let the list intimidate you.  From here he discussed a number of items about lead lists in general.

Lead Lists in General

There are many different types of lists and the lists come in a variety of different formats and include various different types of information.  CTAs should research exactly what they will get with these lists and some questions which the purchaser should ask include the following:

  • Has the list maker described their list and what they provide?
  • What is the reputation of the list maker?
  • Does the list have references, if no, then why?
  • Is there a free sample?
  • What information is on the list – key contact names, size of the investor, email addresses.

CTA managers should think about making some calls to the investors on the sample lists which are released.  Basically the manager wants to make sure that the list is not something that was simply culled from the phone book – the leads need to be warmer.  If they are providing a general list of investors, this is ok but it will probably take you more time.

Budget

The biggest thing to consider is your budget.  If you don’t have money in the budget to buy a list, then don’t buy it.  A CTA should always be aware of the fees coming in and be able to justify any expenses, which includes a list.

Prepping an Investor Database

When you get a lead list it will typically be in some sort of spreadsheet like excel and it will be up to the CTA to clean up the data and make it user friendly.  There are a number of different ways to establish databases that will work for keeping track of investors contacted and to contact.  After formatting a database or input, the CTA should always back-up the new, manipulated data.  From here the CTA will want to export the manipulated data to a CRM.  There are a number of customer relationship management (CRM) software solutions which allow managers to manipulate large raw sets of data, such as the lead lists. It is very important for the CTA to take good notes about the interactions with the leads.

Notes About Emailing Investors from Lead Lists

Emailing your marketing presentation can be a very effective way to market to some of the investors on the lead lists.  However, CTAs should not send every piece of marketing material that they have.  A CTA may want to think about emailing a summary presentation with bullett points.  A teaser like this sets the plate so that when the CTA follows up with the lead (with a phone call), the lead has a little bit of background on the manager, but is not overwhelmed (or worse, annoyed).  CTAs should be aware that even with the best lead lists there is likely to be some email kickback from natural changes in the composition of the company.  The best systems are likely to have 2-3% kickback, the middle tiered lists are likely to have 5-10% kickback and the lower quality lists are likely to have much more.

Approaching Fund of Fund Investors

While many fund of fund investors don’t actively advertise that they allocate to emerging managers, they do and CTA firms should be calling these managers.  Even if a FOF manager decided not to invest with the CTA manager, calling is still a good way to connect and develop a relationship – potentially that relationship can develop down the line.  Fund of fund managers do like CTA and other emerging managers not only because of the potential returns but also because the FOF managers are likely to be able to negotiate carve-outs of the CTA manager’s future capacity.

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This article first appeared in the CTA Expo Blog run by Bart Mallon, Esq.  Mr. Mallon also runs the Hedge Fund Law Blog and is committed to providing useful and easy to understand information for CTAs and CPOs which can be found in our CTA and CPO Registration and Compliance Guide. For more information on CTA registration or compliance services please contact Mr. Mallon at 415-868-5345.

CTA Regulatory and Compliance Discussion

By Bart Mallon, Esq. (www.colefrieman.com)

“Compliance in a Changing Environment”

As we are all well aware both the investing and the regulatory environments have experienced a dramatic refocusing on compliance and related issues in the wake of the 2008 meltdown and the Bernie Madoff affair.  This overview is for the CTA Expo 2009 program entitled Compliance in a Changing Environment.  The program was sponsored by Woodfield Fund Administration and featured Kate Dressel of Strategic Compliance Solutions as well as Patty Cushing of the National Futures Association.

Ms. Dressel announced that compliance and processes and procedures have become increasingly important, especially since investors are now concerned about fraud.  The best defense with regard to fraud, and an theme that pervaded this and other discussions, is that a CTA needs to have a reputable accountant and auditor.  Having reputable service providers (including administrators, auditors and legal firms) will help potential investors/clients to feel more comfortable with the CTA and the investment program.

Ms. Cushing, who is the associate director for Risk Management and Member Education at the NFA, began by emphasizing that CTA performance information needs to be accurate.  She also mentioned that CTAs really need to be focused on trading and the other business issues, especially accounting and legal, should be done by experienced people or service providers.  Ms. Cushing made reference to the NFA’s spreadsheet (although I could not find this on the NFA’s website) as well as an informative webscast by the NFA discussing CTA Performance Reporting webcast.  Basically she said that if you don’t want to spend the time making sure that all of the numbers are perfect, then you are going to need to use a consulting firm.

If you self administrer you are going to need to think about an outside administrator so that there will be increased oversight.

Ms. Dressel talked about the current industry buzzword – transparency.  Transparency is important, she went on, not just in trading but in all aspects of the CTA business.  Compliance and operations, especially, need well ordered and solid procedures in place.  Oversight is the key and it is very important that the principals are aware of everything that is going on in the firm.

[Note: Ms. Cushing talked about forex managers and noted that forex managers needed to make sure they were submitting their forex disclosure documents to the NFA for review.  I spoke with Ms. Cushing after the session was over to gain clarification over her statement and also discuss the forex registration rules which were supposed to be proposed by the CFTC some time ago.  For clarification, I want to point out that forex managers only need to have the NFA review their forex disclosure documents if they are already a member of the NFA – that is, if they are already registered as a CTA or CPO.  Forex only managers who are currently not registered with the NFA (and who trade only in the off-exchange spot markets) currently do not need to register with the NFA.  I discussed this with Ms. Cushing and asked if she had seen a draft of the registration rules or if she had heard anything from the CFTC as to when the rules might be proposed – she said that the CFTC has been working on the rules but that she has no idea when or if the rules will be proposed.  She seemed to be parroting the CFTC on this issue – the agency has told me a number of times that they are working on the rules and that they will be proposed shortly.]

Ms. Cushing mentioned that some CTA firms will actually use a previous NFA audit as a kind of “stamp of approval” by the regulatory agency.  Although the NFA audit is only designed for the NFA Member who was subject to the audit, some Members will send these to their clients.  Accoring to Ms. Cushing, the NFA is taking no opinion with regard to this practice.  She did note, however, that such reports might not be the best source of information regarding a firm’s procedures as it might be out of date.

Ms. Dressel mentioned that mock audits for CTAs are good to pursue – you can contact a number of outside firms like her own that can help a manager through a mock audit.  Not only does a mock audit help a firm for an actual NFA audit, but it will also help to identify operational issues which the manager can refocus upon.

One of the most important items that CTAs should be aware of is their marketing materials and disclosure documents.  It is imperative that CTA firms make sure that every statement in the disclosure documents and other marketing materials be true.  CTA firms should not try to stretch the truth – potential investors are check and there is a whole new paradigm.  Any stretched truth will be uncovered during the due diligence process which now includes, for some managers, phorensic accounting to make sure that trading parameters have been consistently adheared to.  Investors now need absolute confidence in who you are and what you do.

CTA firms should be vigilant about making sure they stick to the trading parameters in the disclosure documents.

A very good piece of advice is that if there is anything in your disclosure documents which is not true, you need to update your documents.  [BM note: and potentially discuss the change with your current investors/clients.]

Ms. Cushing noted that there a number of ways to that your firm can prepare for an NFA audit.  The first step is to read and be aware of the NFA’s yearly self-examination checklist.  [Note: if you do not know about the self-exam checklist, and if you do not have a compliance program in place, please see a CTA attorney or compliance person immediately to become compliant.  The self-exam checklist is a central part of a good compliance program.]  Ms. Cushing urged those firms who have questions about the checklist to call the NFA (although, in practice, this is usually an effort in futility as the staff will generally not ask questions and tell firms to consult with an attorney or other compliance professionals).

Questions From Audience

After this we had an opportunity to move onto questions from the attendees.  One comment came from Fred Gehm who has worked in due diligence for a fund of funds which allocated to the CTAs through separately managed accounts.  He made the statement that if the manager doesn’t have an external administrator the FOF will not allocate to that CTA – even if the CTA has audited returns.  He also made the comment that 10-15% of the time CTAs (or other managers) will lie to him and he will catch it.  Obviously in these cases the FOF does not allocate to such a group.  He said that many times if the manager had been honest about fact in the first place, it would likely have been something that would have been passed over but for the lied.

Ms. Cushing and Ms. Dressel emphasized that the CTA is ultimately responsible for making sure that the books and records are correct – even if there is an outside administrator, the CTA needs to take an active role in this area.

The next questioner noted that family offices and pensions are beginning to get involved in the CTA space and he wondered how smaller CTAs can set up structures to be well positioned for such investors.  Ms. Dressel suggested that the CTA manager get as much of the program together as possible – this means the manager should try to get the best administrators, auditors and legal counsel that they can afford.  The manager should also be able to completely answer a standard due diligence questionnaire – these questionnaires highlight some of the important structural and governance items that family offices and pensions will be focusing on.

Mr. Gehm mentioned that he is concerned with two central issues when allocating to small CTAs: (1) custody and (2) risk management.  With the first, custody, he said he was especially concerned with who signs the checks and where is the dollar control.  Fred recommended that CTAs have secondary signer for disbursements.  With regard to the second issue, risk management, he said he looked for a structure where someone with independent authority had authority with regard to this issue.  The key here is that the risk manager should have no fear of losing his job, that there is contractual safeguards for him doing his risk management.

There were a couple of other brief questions before the session ended.  One takeaway with regard to risk management is to think about things throughout the organization – key man provisions and plans for odd eventualities.  The more that a CTA manager really thinks about and understands the risk of his business, the better it will be for the investors and the more likely for the CTA manager to have an easier time raising capital.

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This article was first printed on the CTA Expo Blog.  This article was contributed by Bart Mallon, Esq. who runs the Hedge Fund Law Blog and is committed to providing useful and easy to understand information for CTAs and CPOs which can be found in our CTA and CPO Registration and Compliance Guide. For more information on CTA registration or compliance services please contact Bart Mallon, Esq. at 415-868-5345.

CFTC Head Addresses Futures Industry in Chicago

Futures Industry Association Annual Expo

CFTC Chairman Gary Gensler today spoke at the Futures Industry Association’s annual expo in Chicago. While most of the Chairman’s speech  focused on the proposed regulation of the OTC derivatives markets, Chairman Gensler also discussed the recent SEC and CFTC Harmonization report. As you can imagine, Gensler is for increasing regulation of the entire financial markets. Below I have included some of the more interested quotes which can be found in the text of the speech text of Chairman Gensler’s speech.

The CTA Expo was going on as well during this time and I will be writing more articles on the speakers at this conference over the next few days.

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Both of the committees’ bills include three important elements of regulatory reform: First, they require swap dealers and major swap participants to register and come under comprehensive regulation. This includes capital standards, margin requirements, business conduct standards and recordkeeping and reporting requirements. Second, the bills require that dealers and major swap participants bring their clearable swaps into central clearinghouses. Third, they require dealers and major swap participants to use transparent trading venues for their clearable swaps.

The challenge remains, though, determining which transactions should be covered by these reforms. I believe that we must bring as many transactions under the regulatory umbrella as possible. This will best accomplish the two principal goals of reform: lowering risk to the American public and promoting transparency of the markets.

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To promote market transparency, all standardized OTC products should be moved onto regulated exchanges or trade execution facilities. This is the best way to reduce information deficits for participants in these markets. Transparency greatly improves the functioning of the existing securities and futures markets. We should shine the same light on the swaps markets. Increasing transparency for standardized derivatives should enable both large and small end-users to obtain better pricing on standard and customized products.

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Some have articulated a false choice between stronger regulation on the one hand and a free market on the other. Rules improve markets, however, by enhancing efficiency and integrity. Traffic lights require you to stop your car, but they also ensure that traffic is orderly and efficient. They reduce risks for every person on the highway. Similarly, this country’s markets work best with clear rules of the road.

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Last year’s crisis also highlighted the need for regulators to change. In that regard, the CFTC last week released a joint report with the SEC to bring greater consistency, where appropriate, to our regulatory approaches. While the missions of the CFTC and the SEC may differ, our goal is the same: to protect the public, enhance market integrity and promote transparency. In preparing our report, we set turf aside and focused on those changes that would best benefit the markets and the American people.

We jointly made 20 recommendations where we can change our statutes and regulations to enhance both agencies’ enforcement powers, strengthen market and intermediary oversight and facilitate greater operational coordination.

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Other related hedge fund law articles include:

CTA Expo 2009

Commodity Trading Advisor Conference

Next week there will be a conference for Commodity Trading Advisors held in Chicago at the Hotel Monaco.  The conference, entitled the CTA Expo 2009, will be held on Wednesday and will feature a variety of topics of interest to CTAs.  The agenda includes:

I will be representing my firm, Cole-Frieman & Mallon LLP, at the conference and I look forward to meeting with the different traders and service providers at the event.  Each entrant will also receive a CTA Directory which will include a “tear sheet” on all of the groups which attended.  Please see the Cole-Frieman & Mallon LLP description of CTA services.

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Event information can be found here.  There is also a CTA Expo LinkedIn Group.

CTA EXPO 2009
October 21, 2009
Hotel Monaco Chicago, Illinois

CTA EXPO consists of a day of roundtables and seminars for Commodity Trading Advisors on marketing strategy combined with an all day schedule of thirty minute presentations by individual CTAS to small groups of professional money raisers, asset allocators and interested clients who are seeking to identify additional trading talent.

The debut conference in 2008 sold out in advance and was attended by over thirty-five CTAs and over sixty people who registered as professional money raisers and asset allocators. We have increased capacity for 2009 and interest in this year’s event has already been tremendous and we are anticipating another sold out event.

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The hedge fund law blog is committed to providing useful and easy to understand information for CTAs and CPOs which can be found in our CTA and CPO Registration and Compliance Guide.  For more information on registration or compliance services please contact Bart Mallon, Esq. at 415-868-5345.

CTA and CPO Registration and Compliance Guide

Practical guidance for CTA and CPO firms

Commodity Trading Advisors (CTAs) and Commodity Pool Operators (CPOs) have been contacting me with greater regularity and we have decided to provide those firms with more detailed information on their registration and compliance requirements. Over the course of the next few weeks we will be continually updating this page with more legal and business guidance for CTAs and CPOs. Specifically, we will be providing information on the following topics:

CTA and CPO Registration – this article discusses the how-to’s of registration with the CFTC. The article details the general requirements for firms, principals, and associated persons. Included in this discussion is information on CTA/CPO exam requirements and an overview of the registration process through the NFA’s electronic registration system.

CTA and CPO Registration Exemptions – while the Commodities Exchange Act will generally require CTA and CPO firms to register with the CFTC, there are some important exemptions from the registration provisions. Review this article to see if your firm might be able to claim an exemption from the registration provisions.

CTA and CPO Compliance Overview – CTAs and CPOs are subject to a number of laws, regulations and rules. Not only must CTAs and CPOs follow CFTC laws and regulations, but as Members of the NFA, these groups must also follow all of the rules developed by the NFA. We will be discussing compliance best practices, major examination issues, major deadlines and the CTA/CPO compliance manual. Being prepared for an NFA examination is of great importance.

Recent NFA Actions against CTA and CPO Managers – the NFA and the CFTC have been quite active lately. In this article we will be discussing some of the most recent actions against NFA member firms. This article will also provide common-sense advice on what managers can do the protect themselves from examination deficiencies.

Important NFA Rules for CTA and CPO Firms – there are a number of rules which the NFA has regarding the conduct of CTAs and CPOs. In general CTAs and CPOs must hold themselves out with the utmost professionalism. This article will detail this and other important NFA rules.

CTA and CPO advertising – there are a number of important rules regarding advertising for CTAs and CPOs. CPOs, especially, must be careful about advertising because of the restrictions under Rule 506 of Regulation D, an exemption that many CPOs utilize in offering their fund interests. Websites will be touched upon in this post and will also be discussed in greater depth in a subsequent posting.

CTA and CPO websites – many CTA firms utilize the internet to advertise their services. CPO firms will also sometimes have a (minimal) internet presence. This article will detail the considerations that both CTA and CPO firms face when creating and maintaining an internet presence and how to deal with internet based inquiries from potential investors.

NFA Exam Requirements for CTAs and CPOs – individuals of NFA member firms will generally need to have a Series 3 exam license and potentially a Series 30 exam. Some individuals may need to have a Series 31 exam license and, potentially in the future, forex CTAs and CPOs will need to have a Series 34 exam license. This article will discuss these exams and the process an individual will go through in order to register to take the exams.

CTA Expo Blog – the unofficial blog of the CTA Expo most recently held in October of 2009.  Information for CTA managers on business, legal and compliance issues.  Included is a directory of CTA firms and service providers.

Forex CTAs and CPOs – the regulatory light has been focused on retail spot forex managers recently. Read this article to get up to speed on recent CFTC and NFA pronouncements regarding this area of the industry. We will also provide information on Forex IBs and Forex FCMs.

In addition to the above topics we are hoping to add others over time. We welcome all feedback and encourage you to leave comments below. We will also attempt to answer CTA and CPO frequently asked questions.

If you are a manager or firm that needs to register as a CTA or CPO, or if you are contemplating registration, please contact Bart Mallon, Esq. of Cole-Frieman & Mallon LLP at 415-868-5345.