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Amendments to NFA Promotional Materials Rules

April 22nd | 2020



Amendments to NFA Promotional Materials Rules for CTA/RIAs Compliance Rule 2-29 and related Interpretive Notice

NFA Compliance Rule 2-29 and Interpretive Notice 9003 – NFA Compliance Rule 2-29: Communications with the Public and Promotional Material require, among other things, that past performance used in promotional material be presented net of all commission, fees and expenses. NFA recently amended these requirements to allow commodity trading advisor (CTA) Members that are also SEC registered investment advisers (RIA) to present past performance to eligible contract participants (ECP) on a gross basis in non-public, one-on-one presentations. To rely on this limited exception, a CTA Member/RIA must:

  • Provide 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

  • Offer to provide the ECP 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.

These amendments are effective today. More details can be found in the NFA’s letter to the CFTC.

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