Records to Be Maintained

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Chapters in this video

  1. 0:00 Regulators, CPOs, and CTAs: who keeps what
  2. 1:19 Bunched order basics: combine, execute, allocate
  3. 3:21 The four strict criteria for allocation methods
  4. 5:01 Passing the fairness test over time
  5. 6:32 Quarterly reviews and the recordkeeping punchline

What this video covers

  • Which records a CPO keeps (pool books, subscriptions, redemptions, participant ownership) versus which records a CTA keeps (advice given, directed transactions, performance calculations)
  • The inspection rights of the CFTC and NFA and what "verifiable trail" means in practical terms
  • The three-step flow of a bunched order: combine, execute as one, then allocate fills back to individual accounts
  • Why bunching orders is permitted and encouraged, while cherry-picking favorable fills post-execution is a violation
  • The four required characteristics of a bunched order allocation method: pre-established, objective, non-preferential, and independently verifiable
  • What "fair and equitable over time" means, and why a single lucky fill is not a violation while consistent favoring of accounts is
  • The quarterly review requirement for trading programs and what records must be kept and produced to clients or regulators

Read the full lesson, free

This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete Series 3 course also includes adaptive practice questions and spaced-repetition flashcards, free through the end of 2026.

Read the Free Lesson → free · no signup wall