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.