Can a CPO also be a Third Party System Developer?

Discussion in 'Professional Trading' started by beowulf, Dec 16, 2016.

  1. beowulf

    beowulf

    I have been unable to find any relevant information to this question. More specifically can a NFA Registered CPO also be a third party system developer and can a CPO that manages an exempt pool be a third party system developer?

    Thank you for your help
     
  2. Robert Morse

    Robert Morse Sponsor

    Why do they have to be the same entity? Are you going to share the income with your investors? By the way, the CPO also needs to be SEC registered, unless except.
     
  3. wintergasp

    wintergasp

    Yes an Operator of a Commodity Pool can be a third party system developer, @Robert Morse I don't think @beowulf is talking about the pool itself but rather the operator.
     
  4. beowulf

    beowulf

    Wintergasp, thank you for your response, that is correct I'm referring to the Operator of the pool. My confusion is whether it makes a difference to the NFA if the pool that the CPO manages is an exempt pool. Most third party system developers are exempt from having to register as a CTA. There is a statement in the nfa rules that say " To qualify for the exemption, under Rule 4.14(a)(9)(i) a CTA may not direct client accounts."
    https://www.nfa.futures.org/nfamanual/NFAManual.aspx?RuleID=9055&Section=9

    So if the CPO is directing an exempt pool and based on the statement above, would that disqualify the CPO from the exemption available to third party system operators of registering as a CTA?

    Robert, thank you for your response. The entity that will obtain the revenue from the third party system developer subscriptions is the Operator not the pool. With regards to SEC registration the pool falls under Reg D so no need to register with SEC, registration is only needed with NFA and CFTC.

    Thanks for you input