Commodity Trading Adviser Certification

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A commodity trading adviser (CTA) manages futures trading accounts for his clients. A CTA selects and places all trades for customer accounts. The CTA typically is compensated with a percentage of the profits he earns in the client accounts. The National Futures Association (NFA) handles the registration of commodity trading advisers.

National Commodity Futures Examination

A prospective CTA must pass the National Commodity Futures examination, commonly called the series 3 exam. The series 3 is required for any individual working for a commodity futures broker in a customer sales or service capacity. The exam consist of 120 questions, has a two-hour, 30-minute time limit and is administered by the Financial Industry Regulatory Authority (FINRA). Series 3 results are valid for two years, so application for CTA registration must begin within that time frame.

NFA Membership

The prospective commodity trading adviser must apply to the NFA for membership as a CTA. The application is accomplished by completing the online forms 7-R and 8-R. The form 7-R is application as a company for NFA membership. The form 8-R is completed for each individual in the company who will be trading for client accounts. An individual who will be an independent CTA must complete both forms. A fingerprint card must be sent to the NFA as part of the application process.

CTA Fees

The initial application fee for a CTA registration is $200, as of 2011. An 8-R application for each person working in the CTA company requires an $85 application fee. For an individual applying to be a CTA the total application fees will be $285. The first-year membership fee as a CTA to the NFA is $750 in 2011. The total minimum payment to apply for CTA registration is $1,085.

CTA Registration Considerations

The NFA website lists several circumstances in which registration as a CTA is not required. An individual providing commodity trading advice to fewer than 15 clients during the year and not advertising herself as a CTA does not need to register. If someone is already a registered investment adviser (RIA), CTA registration is not required. Individuals who provide trading advice on a general basis solely through email, a website, newsletters or seminars are not required to register as CTAs.

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