How do you become a CTA ?

Discussion in 'Professional Trading' started by Samson77, Apr 29, 2005.

  1. I'm curious I have never really looked into this before but I was a stockbroker many years ago and I know that was just a matter of writing an exam.

    What about becoming a CTA.

    Can you be independent.

    Can you market for clients.

    Does anyone have a link that they can point me too?
  2. wdscott


  3. Truff


    First you need to pass the series 3. Then you need to register with the NFA as a CTA, get fingerprinted, pay the initial CTA fee which is $800 i believe. Then you need to prepare your disclosure documents which are explained in the previous post. After they are approved by the NFA, you can now use the disclosure document to solicit business.
  4. Truff - Thanks now it makes sense!

    So where does one go to register for a Series 3? excuse my ignorance I'm Canadian and we have different governing bodies here.


    Are CTA's limited in their marketing like Hedge Funds and what are the advantages of becoming a CTA versus just registering a Hedge fund?

  5. Truff


    CTA rules are much more LAX then Hedge funds. Remember you are not pooling $ in a CTA. All a CTA is a fancy name for futures broker like a stock broker.
  6. Pasted from an email, I know someone who emailed to ask:

    " Being a resident of Canada does not alter the
    process of registration. However, you may receive an additional
    question on the online application asking you for the name of each foreign regulatoryauthority or self regulatory organization that has regulated the applicant during the past five years."

    CFTC as a Commodity Trading Advisor ("CTA"). Generally, CFTC
    registrationis required when an individual or entity places futures or commodity options trades at U.S. contract markets on behalf of U.S. customers. A description of the activities that would require registration with the CFTC as a CTA along with filing requirements for CFTC registration and NFA Membershipis
    available on our web site at

    If you plan to exercise discretion over customer accounts as a CTA, NFA membership is required, as well as providing proof of passing the NCFE within the two-year period preceding the date that you file your application for NFA membership.

    The National Association of Securities Dealers ("NASD") administers the NCFE on behalf of NFA at Prometric Registration Center. The NASD application form required to be filed in order to take the exam is the Form U-10.
    Itshould be mailed to the NASD along with the examination fee of $75.00. The Form U-10 is available from the NASD's web site at In order to find a testing
    location near you, please contact Prometric at (800) 578-6273 or check the NASD's web site at

    NFA does not provide any study courses for the NCFE. However, we offer a Study Outline for Futures Exams, which contains an overview of the topics covered on the NCFE. The Study Outline is located on our web site at.

    To prepare to pass
    the regulatory portion of the NCFE, you may wish to review NFA's
    compliance-related publications, as well as the NFA Manual, which are available at To
    prepare to pass the market knowledge portion of the NCFE, you may wish to visit one or more of the web sites of the U.S. contract markets, links to
    which are available at

    To apply for CFTC registration as a CTA, you must do so using NFA's mandatory Online Registration System ("ORS") via our web site. ORS is a user-friendly web based system that allows you to conveniently register online. Information regarding ORS is available on our web site at You may also wish to review the Frequently Asked Questions located on NFA's web site at

    You must electronically file for the CTA, a Form 7-R application in ORS.You also electronically file Form 8-R applications in ORS for all
    Associated Persons and principals of the firm. NFA fingerprint cards, CFTC registration fees and NFA membership dues continue to be sent to NFA by mail. Registration fees and membership dues are as follows.

    NFA membership dues are $1,000.
    CFTC registration fee as a CTA is $200.
    Submitting a Form 8R for registration as an Associated Person and/or
    principal is $85

    NFA has recently enhanced ORS allowing you to remit your payment to us electronically. The system requires you to indicate your bank routing number, account number and an e-mail address where we can send a confirmation of the transfer.

    Before using ORS you must establish a security account with NFA and designate a Security Manager. To do this you complete an online enrollment form and receive a temporary password. The online enrollment form is available on our web site at Once the online
    enrollment form is submitted to NFA, NFA mails a user name. The user name along with the temporary password allows the Security Manager to file applications for CFTC registration and NFA membership in ORS
  7. Toronto - Thanks very useful info.

    Seems like you have done this?
  8. So a CTA can only collect fee's on transaction NOT take or share in profits?
  9. slacker


    Yesterday I attended a web seminar by Interactive Brokers titled "How to Become a CTA". I thought it was a very good overview from 3 different presenters.

    They promised to place all of the slides on their site by next week ( but only 1 set so far, I just checked). The email addresses I am sure are available from IB if you send a request.
    Good luck,
  10. I think management and incentive fees are common.

    Here's another source for answers:
    #10     Apr 29, 2005