[Code of Federal Regulations]
[Title 17, Volume 1]
[Revised as of April 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 17CFR4.31]

[Page 201-202]
 
              TITLE 17--COMMODITY AND SECURITIES EXCHANGES
 
             CHAPTER I--COMMODITY FUTURES TRADING COMMISSION
 
PART 4_COMMODITY POOL OPERATORS AND COMMODITY TRADING ADVISORS--Table 
of Contents
 
                  Subpart C_Commodity Trading Advisors
 
Sec.  4.31  Required delivery of Disclosure Document to prospective 
clients.

    (a) Each commodity trading advisor registered or required to be 
registered under the Act must deliver or cause to be delivered to a 
prospective client a Disclosure Document containing the information set 
forth in Sec. Sec.  4.34 and 4.35 for the trading program pursuant to 
which the trading advisor seeks to direct the client's commodity 
interest account or to guide the client's commodity interest trading by 
means of a systematic program that recommends specific transactions by 
no later than the time the trading advisor delivers to the prospective 
client an advisory

[[Page 202]]

agreement to direct or guide the client's account; Provided, That any 
information distributed in advance of the delivery of the Disclosure 
Document to a prospective client is consistent with or amended by the 
information contained in the Disclosure Document and with the 
obligations of the commodity trading advisor under the Act, the 
Commission's regulations issued thereunder, and the laws of any other 
applicable federal or state authority; Provided further, That in the 
event such previously distributed information is amended by the 
Disclosure Document in any material respect, the prospective participant 
must be in receipt of the Disclosure Document at least 48 hours prior to 
the advisory agreement being accepted by the trading advisor.
    (b) The commodity trading advisor may not enter into an agreement 
with a prospective client to direct the client's commodity interest 
account or to guide the client's commodity interest trading unless the 
trading advisor first receives from the prospective client an 
acknowledgment signed and dated by the prospective client stating that 
the client received a Disclosure Document for the trading program 
pursuant to which the trading advisor will direct his account or will 
guide his trading. Where a Disclosure Document is delivered to a 
prospective client by electronic means, in lieu of a manually signed and 
dated acknowledgment the trading advisor may establish receipt by 
electronic means that use a unique identifier to confirm the identity of 
the recipient of such Disclosure Document, Provided, however, That the 
requirement of Sec.  4.33(a)(2) to retain the acknowledgment specified 
in this paragraph (b) applies equally to such substitute evidence of 
receipt, which must be retained either in hard copy form or in another 
form approved by the Commission.

[60 FR 38189, July 25, 1995, as amended at 62 FR 39115, July 22, 1997; 
68 FR 47235, Aug. 8, 2003; 68 FR 59114, Oct. 14, 2003]