Forex CTA

A forex commodity trading advisor (“CTA”) is a firm that provides forex advisory services to separately managed accounts. In general, all forex CTAs will need to be registered under the new forex registration rules. The following is an overview of the requirements for a forex CTA to register with the CFTC and become a member of the NFA.

Exam Requirements

Each principal [eventually to be linked to terms section] and associated person [eventually to be linked to terms section] will need to have passed both the Series 3 exam and the Series 34 exam. Additionally, if there is a branch office [eventually to be linked to terms section], the manager of such branch office will need to have passed the Series 30 exam.

Fingerprint Requirements

The NFA will require each principal and associated person to provide fingerprint cards which will be run through the FBI databases prior to the registration of such person. While a felony or misdemeanor will not necessarily disqualify you from registering, it will likely delay the process. For more information, see [link to the FAQ about this subject].

Disclosure Documents & Managed Account Agreement

Each forex CTA will need to have appropriate disclosure documents and a managed account agreement. In general, the CTA disclosure document will include the following sections which describe the CTA’s investment program and structure:

· Forex risk disclosure statement

· Firm & principal background

· Forex dealer information/ Forex IB information

· Discussion of trading program

· Additions / Withdrawals

· Discussion of fees

· Risk factors

· Conflicts

· Litigation

· Order Entry / Allocation Methods

Each disclosure document is specifically drafted to the needs of the client.

Costs

Firm Application - $200

Principal/ AP Application - $85

Yearly NFA Membership Fee - $750

Timing

While we cannot guarantee any specific time frame, generally forex CTAs should be able to get through the registration process within about 3 weeks from the date which the form 7R[] and form 8R[] are submitted to the NFA. Generally the disclosure document can be submitted for review prior to the actual registration of the firm and so the NFA may be able to complete review on the disclosure document concurrently with the registration. Generally the disclosure document review will take about 3 weeks. Accordingly, the whole process can usually be completed within about 4 to 8 weeks from submission of the CTA application.

Questions?

If you have any questions on the above requirements, please contact us [link to contact page] and we will get back to you as soon as possible.