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Paul Weston wrote:
>
>
>
> CTA's do occupy a "special" place in the trading world. Of all the
> traders, only 1100 are CTA's and not all of those actively manage money.
True, about half do (I am one). So if everyone wants to call us
special, ok.
>
> The required test is certainly not simple (IMHO).
It is the general series 3 exam, only a 70% is required to pass. 75%
people pass eventually(I am told). It ain't exactly the bar exam.
>
> There is also periodic ethics training required.
One time thing that is now handled via a software program that you do on
your own time and send back. Not real rigorous.
>
> Before handling funds, a disclosure document must be prepared and approved.
>
> Sales literature must follow certain guidelines.
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> Records must be kept in a specific way.
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> ALL account activity must be tracked and disclosed.
All this is true, and I said it is more stringent when you actually
manage money (which half don't), but these are still not difficult. You
hire an attorney and a CPA for a few grand and you are set up.
>
> If it were as trivial as Eric suggests, system writers, etc would be
> registered because there would be nothing to it.
Many are (500 or so), and of those who aren't, it is my opinion that it
isn't because the requirements are tough, but rather because they plan
to be a bit shady and don't want the regulators to know who they are.
>
> I do not agree that there are "many" CTA's out there who will rip you off.
> There are not that "many" to start with, and if they engage in fraudulent
> practices, they will not be registered for long.
Check out the NFA disciplinary site anytime. THere are registered
people being booted out all the time. I don't mean to bad mouth CTA's
at all (I am one), but the reputation is not that great overall. As an
example, at this summer's Managed Funds Conference, a major theme from
some speakers was for CTA's to distance themselves from the terms CTA
and commodities and futures in their marketing material. This is because
of the bad reputation. In the words of Burt Kozloff (a large CTA money
raiser), "if you call yourself a CTA, it's like you have a stain on you
that you will never wash off". They are encouraging all CTA's to refer
to themselves as "hedge fund managers" or "alternative investment
mangers" even though they are registered as CTA's. Believe me for the
newer traders who were there (I am one), it didn't feel too special to
be a CTA. The MFA even changed their name from Managed Futures Assn to
Manged Funds ASsn to escape the image of the futures markets.
>
> Registration is not a cure all. No more that being a CPA guarantees a
> correct tax return, passing the bar guarantees prevailing in a suit,
> passing the boards guarantees a doctor will make a correct diagnosis, etc.
>
> However, I personally prefer working with people (in any field) who have
> been certified as having some knowledge of the field they are working in.
Amen to that.
Eric
>
> Paul Weston
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