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Many thanks to all who responded regarding my CTA exemption question.
In the spirit of the omega-list cyber community, I will share what I
learned. Of course what I say is my lay opinion so certainly don't rely on
it without research for yourself.
Especially useful was a Federal Register doc that a helpful fellow
omega-lister, who's privacy I'll respect, pointed me to.
http://www.cftc.gov/files/foia/fedreg00/foi000310a.pdf
This doc is available on the CFTC's website and goes into great detail on
the CFTC's adoption of Rule 4.14(a)(9) exempting certain CTAs from statutory
registration under CEA Section 4m(1). Essentially, as long as a CTA does not
direct client money and does not offer any personalized trading advice, they
are exempt from registration. They are not exempt from other CFTC rules that
apply to an CTA without regard to registration such as fraud, deceptive
advertising, disclosure of the limitations of hypothetical or simulated
trading results as an indicator of actual performance, etc.
Also, if a 4.14(a)(9) CTA decides to voluntarily register they become
subject to all the rules and regulations as if they were not exempt from
registration. Specifically, they would be required to comply with all the
disclosure doc, record keeping, and ethics training regulations. It was the
burden of compliance with these regulations that I was trying to avoid.
Hooray for Taucher who's efforts in court paved the way for a reasonable
interpretation of the CEA!
Good luck to you all,
Scott Hoffman
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