October 28, 2020

Volume X, Number 302

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NFA Published Amendments to Its Advertising Rules

National Futures Association (NFA) has provided limited relief to commodity trading advisors (CTAs) who are also registered investment advisers from compliance with certain portions of NFA Rule 2-29 “Communications with the Public and Promotional Material” and a related Interpretive Notice. Generally, CTAs presenting past performance in promotional materials are required to include performance net of all commissions, fees and expenses. With this relief, CTAs who are also registered as investment advisers with the Securities and Exchange Commission may present past performance to eligible contract participants (ECPs) on a gross basis in non-public one-on-one presentations, if the CTA:

  • provides the ECP 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 ECP client with the performance results net of any fees and expenses agreed upon by the CTA and the ECP client at or prior to exercising discretion over the client’s account.

The relief took effect on April 22.

The NFA’s submission to the CFTC regarding the amendments is available here.

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 115
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About this Author

Kevin M. Foley, Finance Lawyer, Katten Llaw Firm
Partner

Kevin M. Foley has extensive experience in commodities law and advises a wide range of clients, both in the United States and abroad, on compliance with the Commodity Exchange Act and the rules of the Commodity Futures Trading Commission (CFTC) affecting traditional exchange-traded products, as well as the over-the-counter markets involving swaps and other derivative instruments. His clients include futures commission merchants, derivatives clearing organizations, designated contract markets, foreign boards of trade and an industry trade association.

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312-902-5372
James M. Brady, Katten Muchin Law Firm, Finance Attorney
Associate

James Brady concentrates his practice in financial services matters.

While in law school, James was an editor of the Michigan Journal of International Law. He also served as a judicial intern to the Honorable Stephen J. Markman of the Michigan Supreme Court. http://www.kattenlaw.com/James-Brady

312-902-5362
Gregory Uffner, Financial Services Attorney, Katten Law Firm
Associate

Gregory Uffner is an associate in the Financial Services practice. 

While in law school, Gregory was an associate editor for the Moot Court Board, a member of the Fordham Urban Law Journal and served as managing editor for the Fordham Sports Law Forum.

212.940.6485
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