Revised Answer to Question 1 of the August 2015 Ask the NFA Article:
Selecting and Recommending CTAs- A Recommending CTAs- A Recommending CTA is one who recommends various trading advisors to clients (e.g. individuals, other CTAs or CPOs) but does not have any other authority regarding these trading CTAs. A Recommending CTA is required to be registered and an NFA Member since the CTA is providing commodity trading advice based on, or tailored to, particular clients. The Recommending CTA is not required to provide its own disclosure document to clients and as such is not required to provide past performance information of the clients for which it has acted as a recommending CTA. A Selecting CTA is one who will actually direct or trade the client's account. A Selecting CTA is one who has been granted authority by the client to select, hire, and fire trading CTAs for the client (e.g. individuals, other CTAs or CPOs.) A Selecting CTA is required to provide a disclosure document to the client that includes the past performance of clients for which it has acted as a Selecting CTA. A Selecting CTA is also required to be registered and an NFA Member.
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