On March 6, 2020 NFA submitted to the CFTC a proposed rule change related to how CTAs can show performance results to customers. In particular:

“A CTA Member that is also an SEC Registered Investment Adviser and/or its Associate may present past performance results, including the rate of return, to an eligible contract participant (ECP) on a gross basis in a non-public, one-on-one presentation, if the CTA Member provides the ECP client with a written disclosure that the performance results are presented on a gross basis and do not reflect the deduction of fees and expenses, which will reduce the client’s returns, and offers to provide the client with the performance results net of any fees and expenses agreed upon by the CTA Member and the ECP client at or prior to exercising discretion over the client’s account.”

On the same day they also proposed a change to how hypothetical performance may be shown and what material information must be disclosed.

Firms presenting performance information should ensure they are aware of these changes. If you would like any assistance understanding NFA’s proposed rule amendments please contact Turnkey today via (312) 324-0040, through our contact form at our website, or via email info@turnkeytradingpartners.com