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August 23, 2013 admin 0 Comments

This article discusses critical points to be considered in drafting the performance/incentive provisions, from both the manager and investor standpoints. This article does not discuss the rules for commodity pool operators (CPOs) under the jurisdiction of the CFTC. The CFTC (and the industry self regulatory organisation, the National Futures Association) have no comparable restrictions on a CPO entitlement to performance, provided that the investor receives appropriate disclosure and consents in writing to a performance based compensation (or allocation of profits).

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