• bhanwar b 1:01 pm on March 18, 2010

    The first step to becoming a Commodity Trading Adviser is to review your current situation. The goal here is to find if you are ready to become a CTA or whether you should wait a little bit longer before you start your firm. Here are some questions that you should ask yourself:

    What is your defined trading strategy?

    How do you stack up against the competition?

    Have your returns been consistent over a wide range of market environments?

    Do you have actual or hypothetical returns?

    Who is your target investor?

    In addition to evaluating your trading program, it is best to consider your personal financial and emotional situation. Given the fact that becoming a CTA takes time and money, consider the following questions:
    Do you have the start-up capital to pay for registration, operational, marketing, and miscellaneous costs?

    Is this going to be a full or part-time business?

    If it’s a full-time business, do you have enough money to pay for your mortgage and living costs during this transitional and start-up phase?

    Step 2: The Registration Process

    Once you have decided that you are ready to become a Commodity Trading Advisor, the next step is to meet all of your registration and regulatory environments. It is important to note that there is no formal education process to becoming a CTA. Anyone can become a CTA as long as they meet the following guidelines which are more less country wise.

    Registering and Passing Exam

    Anyone must pass the National Commodity Futures Examination (NCFE or Series 3) within the two years prior to their application. The Series 3 exam is a 120 question, 2.5-hour exam that measures your understanding of the futures market’s make up and regulations.

    Registering with the National Futures Association and CFTC

    Once you pass your series 3 exam, a CTA is required to file the following:

    •· A completed online Form 7-R.

    •· A completed online Form 8-R, fingerprint card and fee of …. for each individual principal. Fingerprint card and fee are not required if such person is currently registered with the CFTC in any capacity or is listed as a principal of a current CFTC registrant.

    •· Individual principals and branch office managers who are applying for registration as an associated person must satisfy all applicable filing requirements. Also, for each branch manager proof of passage of the futures branch office manager examination (Series 30) or sponsorship by a broker-dealer and proof of having met the branch office manager requirements of the Financial Industry Regulatory Authority.

    •· A non-refundable registration fee of …..

    There are also additional fees associated with the above requirements. For examples, all registered CTAs who manage or exercise discretion over customer accounts must be members of NFA in order to conduct futures business with the public. The annual NFA membership fee is …

  • b2fnow 1:01 pm on March 18, 2010