Forex Funds

Off-exchange retail currency or spot, trading (forex) is one of the fastest growing segments of the hedge fund industry and is the most actively traded market in the world.

Off-exchange retail currency or spot, trading (forex) is one of the fastest growing segments of the hedge fund industry and is the most actively traded market in the world. Forex has been a popular investment choice for retail and institutional money managers because forex returns do no correlate to those of equities. While forex funds and other commodity pools share many of the structural characteristics of a traditional equities based hedge fund, the extreme liquidity of the forex markets allowing these funds to extend this liquidity to investors in the following ways:

• Generally no lock-up is imposed;
• Monthly liquidity with notice as short as a week;
• Monthly or more frequent performance reporting; and
• Lower minimum investment requirements given the heightened leverage employed by forex funds.

CPO and CTA Registration Requirements:

If you operate a fund that trades off-exchange retail forex or you provide forex management account services or trading advice to customers, you are subject to the same registration requirements as futures traders, namely that of a CPO or CTA.