1 / 19

Session 2: Disclosure Documents and Performance Reporting Moderator: Patricia Cushing, NFA

Session 2: Disclosure Documents and Performance Reporting Moderator: Patricia Cushing, NFA Panelists: Kate Dressel, Strategic Compliance Solutions Rita Molesworth, Willkie, Farr & Gallagher Kristen Harkins, NFA. Disclosure Document Overview. Main Objectives. Disclosure to Investors

fay
Download Presentation

Session 2: Disclosure Documents and Performance Reporting Moderator: Patricia Cushing, NFA

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Session 2:Disclosure Documents and Performance ReportingModerator: Patricia Cushing, NFA Panelists:Kate Dressel, Strategic Compliance SolutionsRita Molesworth, Willkie, Farr & GallagherKristen Harkins, NFA

  2. Disclosure Document Overview

  3. Main Objectives • Disclosure to Investors • Protect CPO/CTA • Compliance with CFTC Regulations

  4. 4.7 Disclosure • Corollary to Reg D • More sophisticated investors “know to ask”

  5. Updating Disclosure Documents • Changes to Operation or Program • On-Line Registration Changes

  6. Other Consideration: Conflict with other rules applicable to offerings to non-accredited investors

  7. Most Common NFA Comments

  8. Business Background Information • Specify month, year, firm name, business and individual’s duties • Required for last five years, explain gaps • Certain information can trigger disclosure beyond the last five years

  9. FCM Litigation Disclosure • 4.24(l) standard • Updates to Information

  10. Principal Risk Factors • Areas specifically required by the Regulations • Volatility • Leverage • - Liquidity • Counterparty Creditworthiness • Tailor to the offered program

  11. Easy-to-Fix Items • Consistency throughout the document (e.g. dates, fees) • Risk Disclaimers must be verbatim • Page References • Remove the “never traded before” disclaimer once the document is updated to include performance

  12. Performance Reporting

  13. Supporting Documentation • Performance Worksheets for each individual client account • Monthly Carrying Broker Statements

  14. Reliance on Third-Party Providers • Due Diligence • Responsibility remains with the CPO/CTA

  15. Composite Performance Capsules • Accounts trading the same program • Accounts are achieving “materially similar” rates of return (NFA Interpretive Notice ¶9054)

  16. Proprietary Performance • Accounts where more than 50% of the beneficial interest is owned by the firm, its affiliate, family member or any person providing services to the account are considered proprietary • If disclosed, must be disclosed separately from customer performance

  17. Pro-forma Performance • Actual Performance with a pro-forma adjustment for fees • Adjust Proprietary Performance for fees charged to client accounts • Adjusting Customer Performance for a new fee structure

  18. Other Items/Resources • Break-Even Analysis Questions • Tips for using NFA’s electronic Disclosure Document Filing System

  19. Session 2:Disclosure Documents and Performance ReportingModerator: Patricia Cushing, NFA Panelists:Kate Dressel, Strategic Compliance SolutionsRita Molesworth, Willkie, Farr & GallagherKristen Harkins, NFA

More Related