Researching CTA’s: Conducting your Due Diligence

From its inception, aiSource’s mission was to provide valuable information in the managed futures space. In addition to this educational/research process, we always emphasize to our investors to do their own additional research on the commodity trading advisors they are looking to invest with. The following article will give investors a small glimpse into our due diligence process and some takeaways on how they can do their own research on CTAs.

Outside of analyzing various return and risk statistics, infrastructure and pedigree, the aiSource due diligence process includes a procedure that verifies the registration of the commodity trading advisor with the proper regulatory authorities. As a quick recap, CTAs are regulated by two different entities, the CFTC (Commodity Futures Trading Commission) and the NFA (National Futures Association). Created in 1974, the CFTC is a government run agency that was created to oversee the commodity financial markets. You can read more about the CFTC on our website here. In addition to the CFTC, the NFA is a self-regulatory organization specifically established to oversee the futures industry. The NFA helps develop rules, various programs and provide other services that help safeguard the futures industry. Read more on the NFA on our website here. One of the most useful tools that the NFA provides is called BASIC (Background Affiliation Status Information Center). The NFA BASIC platform was developed to help investors and other professionals get important background information about firms and industry professionals in the derivatives industry. For example, if you would like to view a CTA’s registration you would simply visit the BASIC homepage ( and type in the CTA’s name under the firm’s name section. Once you find the CTA that you were looking for, click on the firm’s name and a history of their registration with the NFA will be displayed towards the bottom of the page. In addition to finding specific registration dates on firms and other industry professionals on BASIC, you will also find the following:

  • Current and historical CFTC registration and NFA membership information
  • Financial information for futures commission merchants
  • Regulatory and non-regulatory actions contributed by NFA, the CFTC and the U.S. futures exchanges and swap execution facilities
  • Business address
  • Listed principals of the firm
  • Former and “doing business as” names
  • Exemptions and No-Action Letters

Many of aiSource’ investors rely on us to do this research and due diligence on the various CTAs in the space, however, we also encourage our investors to do their own research as an added safeguard. Utilizing the NFA BASIC platform is a great place to do so!