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CFTC / Large Trader

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  #1 (permalink)
Market Wizard
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I have been "invited" by CFTC to register as a "larger trader", and to complete the CFTC Form 40 “Statement of Reporting Trader”.

What are the consequences of being registered ?

Best regards, Myrrdin

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  #2 (permalink)
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Apparently your position size has exceeded one or more of these thresholds.

I can't offer any personal insight beyond that which is written on the CFTC website, but since you now hold a large futures position you don't have a choice in the matter. You "must" report.

Form 40 instructions,

"A reportable trader must file a Form 40 on call by the Commission or its designee"

"Every person who holds or controls a reportable position must file a CFTC Form 40, Statement of Reporting Trader"


I do know that the information you supply will be used by the CFTC in both monitoring and reporting activities, such as the COT reports that they publish each week. Punters like me are classified in these reports as "non-reportable". You, however, are apparently a big boy now. Congratulations. You're on the CFTC's radar.

If I were in your position I would call your broker or clearing firm and speak to their compliance department. I'm sure they would have resources to help you with your reporting requirements and perhaps offer some additional guidance for how you might be able to minimize your administrative burdens going forward.

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Market Wizard
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Schnook View Post
Apparently your position size has exceeded one or more of these thresholds.

I can't offer any personal insight beyond that which is written on the CFTC website, but since you now hold a large futures position you don't have a choice in the matter. You "must" report.

Form 40 instructions,
[I]

Looking ar the table of the thresholds, most of them are far beyond my position numbers. With one exception: "All other Commmodities: 25".

Indeed, I hold 40 futures for the Bloomberg Commodity Index, which is a small future with a maintenance margin of 700 - 800 USD at Interactive Brokers.

I hope this position does not cause me a lot of problems ...

Best regards, Myrrdin

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Legendary Market Wizard
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myrrdin View Post
I have been "invited" by CFTC to register as a "larger trader", and to complete the CFTC Form 40 “Statement of Reporting Trader”.

Welcome to the Club!

myrrdin View Post
What are the consequences of being registered ?

In reality, other than the government getting information about you - the loss of privacy, none at all - at least for me.


Schnook View Post
but since you now hold a large futures position you don't have a choice in the matter. You "must" report.

Agreed not a choice.


Schnook View Post
If I were in your position I would call your broker or clearing firm and speak to their compliance department. I'm sure they would have resources to help you with your reporting requirements and perhaps offer some additional guidance for how you might be able to minimize your administrative burdens going forward.

For me all I have to do is file a form with the CFTC every two years. They even email me when the form is due. It's a pretty simple form as well. All the actual reporting is done automatically by the broker to the CFTC. I'm sure every broker has systems in place to do this - if they don't they must have small clients!


Schnook View Post
You're on the CFTC's radar.

This is true. I actually had a meeting with the CFTC. They literally called me up and said 'hey we're in town mind if we get together'. I nearly had a heart attack! In reality it was purely informational - and I actually learnt a lot from them. They were literally in town (Houston) from Chicago for the week and doing a round of meetings. They'd seen one of my positions, were curious about it and added me to the list of meetings! This definitely puts you on their radar!

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myrrdin View Post
I have been "invited" by CFTC to register as a "larger trader", and to complete the CFTC Form 40 “Statement of Reporting Trader”.

What are the consequences of being registered ?

Best regards, Myrrdin

Hi Myrrdin,

I see that nobody responded, so I will do my best to help out with the understanding that I'm not a regulatory or compliance attorney and this is not legal advice. This is my view based on what I know about this process.

Not sure what it means to be "invited" to file Form 40. Generally, you are required to do so if you are holding or controlling a reportable position. This isn't an option. A trader must do so. The goal of this is for this federal regulator to understand what you are doing with the position, whether it is hedged or speculative and so on. Their mandate is to make sure that the markets remain orderly and we don't see another LTCM-type of blow-up or cornering of the market. By filing Form 40, you are not "registering" in the classical sense (meaning someone who is holding a license or anything).

If you need the name/number of a good compliance attorney, please drop me a private message.

Good luck!

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Legendary Market Wizard
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FuturesTrader71 View Post
I see that nobody responded

Guess I don't count!

FuturesTrader71 View Post
If you need the name/number of a good compliance attorney, please drop me a private message.

I've been subject to this for approx 10 years. You don't need to spend a lot of money on a lawyer for this. It's not a big deal!

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He might have needed NFA approval before submitting his post, causing a significant delay. Not sure, just guessing.
SMCJB View Post
Guess I don't count!

I've been subject to this for approx 10 years. You don't need to spend a lot of money on a lawyer for this. It's not a big deal!

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SMCJB View Post
Guess I don't count!

I've been subject to this for approx 10 years. You don't need to spend a lot of money on a lawyer for this. It's not a big deal!

That is so weird. I came here and looked and there were no replies. I refreshed and there they all are. Sorry about this!

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FuturesTrader71 View Post
That is so weird. I came here and looked and there were no replies. I refreshed and there they all are. Sorry about this!

No worries. I thought your reply was a little strange. You do a lot for the trading community in general, for which I salute you. Stay Safe in these interesting times!

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Market Wizard
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FuturesTrader71 View Post

Not sure what it means to be "invited" to file Form 40.

In Austrian language, "invited", using quotation marks, means the same as "required". Sorry - our language is not as clear as yours ...

There is a saying regarding Germans and Austrians, who both have German as their native language: "The major difference between Germans and Austrians is the common language."

Best regards, Myrrdin

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.. made me giggle. Thanks for that

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myrrdin View Post
In Austrian language, "invited", using quotation marks, means the same as "required". Sorry - our language is not as clear as yours ...

There is a saying regarding Germans and Austrians, who both have German as their native language: "The major difference between Germans and Austrians is the common language."

Best regards, Myrrdin

I wonder what would happen if I "invited" my wife to give me a 1 hour back massage every single day?



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I wonder what would happen if I "invited" my wife to give me a 1 hour back massage every single day?



Mike

She'd "invite" you to sleep on the couch.

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