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  • Advantage Futures (Loop)

    231 S. LaSalle Street
    Suite 1400
    Chicago, IL 60604

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    • MAIN PHONE
      312.800.7000

  • Downers Grove Trading Facility

    1501 W. Warren Ave.
    Downers Grove, IL 60515

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    • MAIN PHONE
      630.353.2700

Advantage Futures

Disclosure Documentation

Commodity Futures Trading Commission Rule 1.55

ADVANTAGE FUTURES LLCDisclosure Document

The Commodity Futures Trading Commission (“CFTC”) requires each futures commission merchant (“FCM”), including Advantage Futures LLC (“Advantage”), to provide the following information to a client prior to the time the client first enters into an account agreement with the FCM or deposits money or securities (funds) with the FCM. Except as otherwise noted below, the information set out is as of November 1, 2022. Advantage will update this information annually and as necessary to account for any material change to its business operations, financial condition or other factors Advantage believes may be material to a potential client decision to do business with Advantage.

I. Advantage Information and Principal

Advantage is the primary operating subsidiary of Advantage Financial LLC, our holding company. Advantage is registered with the CFTC as a FCM, Commodity Pool Operator (“CPO”) and Commodity Trading Advisor (“CTA”) and is a member of the National Futures Association (“NFA” [Member ID # 327359]). Advantage does not currently have any funds or accounts under management in its capacities as a CPO or CTA. Advantage Securities LLC (“Advantage Securities”), a broker dealer registered with FINRA, operates as a wholly owned subsidiary of Advantage, and is currently not clearing any business.

Advantage Financial LLC has three other subsidiaries: Advantage Capital Resource LLC (“ACR”), Advantage Building LLC (“AB”) and LaSalle Street Technology LLC (“LST”). ACR exists to provide margin financing for clients under certain conditions and is not currently providing any financing. AB is an entity formed to own an office building located in Downers Grove, Illinois which serves as Advantage’s business continuity site, as well as office space for its clients and some employees. LST offers server hosting, colocation and information technology services.

Advantage’s Principal Place of Business and contact information:

Headquarters:

                                                            231 S. LaSalle Street
                                                            14th Floor
                                                            Chicago, IL 60604
                                                            Telephone Number: 312-800-7000
                                                            Fax Number: 312-800-7810
                                                            ContactUs@advantagefutures.com
                                                            www.advantagefutures.com

Business Continuity Site and Branch Office:

                                                           1501 West Warren Avenue
                                                           Downers Grove, IL 60515
                                                           Telephone Number: 312-800-7000
                                                           Fax Number: 312-800-7810

Principals:

Joseph M. Guinan, Jr.         Founding Chairman & CEO
Business Location: Headquarters

The Chief Executive Officer (“CEO”) has oversight and responsibility of overall operations and resources of Advantage and acts as the main point of communication amongst the members.

Mr. Guinan is the Founding Chairman, CEO, Governing Body, and Managing Member of Advantage. Prior to establishing Advantage in June 2003, Mr. Guinan served as Executive Vice President, Mizuho Securities USA. Before that, he was President and CEO of Fuji Futures Inc. (“Fuji”) where he worked from 1995 to 2002. Prior to Fuji, he held various trading and management positions at Irving Trust, Kidder Peabody, and Merrill Lynch. He is a member of the Chicago Board of Trade and NYMEX. Mr. Guinan received a BA in economics and an MBA in finance and accounting from Columbia University.

Thomas Guinan            Chief Technology Officer
Business Location: Headquarters

Reporting to the CEO, the CTO manages the Information Technology (“IT”) Department and is responsible for implementing and monitoring Advantage’s Information System Security Program (“ISSP”) and Cybersecurity initiatives.

Mr. Guinan has been with Advantage since its inception in 2003. His career in the futures industry began on the CME trading floor in 1987 and expanded to IT after he received an MBA and an MS in computer science from the University of Chicago. He also earned a BBA from the University of Texas. Mr. Guinan’s unique blend of industry experience and IT knowledge led him to develop and maintain Advantage’s technology infrastructure and support staff..

William Harrington III        EVP – Business Development
Business Location: Headquarters

Reporting to the CEO, EVP – Business Development is responsible for leading the development of new business for Advantage. This encompasses the development and implementation of an Advantage-wide sales plan.

Mr. Harrington joined Advantage in 2004. He is responsible for overseeing, managing, and coordinating Advantage’s business development activities. Prior to this position, he served as Senior Vice President of Institutional Business Development at Advantage. Mr. Harrington began his career in the futures industry with Merrill Lynch Futures in 1987 before joining Fuji Securities (later Mizuho Securities USA) in 1995 as Vice President of Institutional Sales. He worked closely with large institutional clients emphasizing interest rate, foreign currency and equity futures and options trading. Mr. Harrington earned a BBA in finance from the University of Notre Dame.

Lisa C. Jones             Chief Compliance Officer
Business Location: Headquarters

Reporting to the CEO, the CCO is responsible for ensuring Advantage-related business is conducted in compliance with current CFTC, NFA, and Exchange rules and regulations.

Ms. Jones joined Advantage in 2004. She began her career in 1990 at Lind-Waldock & Company, a registered FCM, where she served as Compliance Officer. Ms. Jones later joined the Bank of Montreal and Harris Bank as the US Treasury Compliance Manager in 1995. She was primarily responsible for overseeing US Treasury activities, including exchange traded and over the counter markets. Later, she served in a variety of compliance roles within Fuji Bank Ltd. subsidiaries, including Chief Compliance Officer of Fuji Futures Inc. Ms. Jones holds a BBA from Loyola University of Chicago.

Sung Soo Kim
Business Location: N/A

Mr. Sung Soo Kim is a passive investor of Advantage Financial LLC. Mr. Kim does not have management oversight for the business activities or day to day responsibilities of the operations of Advantage.

Michael McLaughlin         President – Institutional Sales
Business Location: Headquarters

Reporting to the CEO, President of Institutional Sales at Advantage, Mr. McLaughlin oversees the CME, CBOT, and off-floor execution team, and is responsible for leading business development in these areas.

Mr. McLaughlin joined Advantage in 2004. He began his career in the financial industry at Merrill Lynch in 1986, where he served as Manager of short-term interest rates until 1995. He later held the position of Managing Director at Fuji Futures where he managed the CME, CBOT, and upstairs sales staff for eight years. Mr. McLaughlin holds a BS in finance from the University of Iowa.

Curt Paloumpis           Chief Risk Officer
Business Location: Headquarters

Reporting to the CEO, the CRO monitors, manages, mitigates, and reports the nature and extent of material Advantage risks and financial exposures. He implements and ensures compliance with enterprise risk management policies and procedures.

Mr. Paloumpis rejoined Advantage in October 2014 and was appointed CRO effective April 10, 2019. Earlier in his career with Advantage, he served as an institutional and professional trader salesman from January 2004 through June 2011. He began his career in 1983 at Drexel Burnham Lambert as a short-term interest rate trader. He was a member of the Chicago Mercantile Exchange from 1990 to 2010. From June 2011 until October 2014, he traded proprietarily at various trading firms. He has extensive experience in the futures and derivatives industry. Mr. Paloumpis earned a BS in Finance from Southern Illinois University.

Carlos Rodriguez          Chief Financial Officer
Business Location: Headquarters

Reporting to the CEO, the CFO oversees accounting at Advantage. The CFO protects the assets of the company, ensures regulatory compliance and protection of customer funds, accurately reports Advantage financial results, and forecasts Advantage capital requirements.

Mr. Rodriguez joined Advantage in May 2017. Prior to Advantage, he worked for CME Group for more than 20 years, most recently serving as Executive Director in the CME Group Financial and Regulatory Surveillance Department. During more than 20 years at CME Group, he was responsible for regulatory, financial and compliance oversight of clearing member firms. Mr. Rodriguez holds a BS in Accountancy from the University of Illinois at Chicago.

Mark Frank            Senior Vice President – Operations
Business Location: Headquarters

Reporting to the CEO, the Senior Vice President of Operations is responsible for monitoring client position balances and related trade price information, reconciling exchange clearing fees, performing trade allocations, balancing carrying broker accounts and submitting regulatory data to exchanges and CFTC.

Mr. Frank rejoined Advantage in November 2021 as Senior Operations Manager overseeing all aspects of the Advantage Operations Department. When Mr. Frank was previously with Advantage from 2007 to August 2017, he served as back-up for various operational areas, including but not limited to, execution allocations, middle office platform maintenance, exchange and carrying broker balancing, deliveries and options expiration. From November 2018 until October 2021, Mr. Frank worked as a consultant for Pictet Overseas Inc. (POI), a US non-clearing FCM. During that time, Mr. Frank developed Pictet operational policies and procedures.  

II. Advantage’s Business

Advantage is a clearing member of CME Group (including CME, CBOT, NYMEX, and COMEX), ICE Futures Europe, ICE Clear Europe, ICE Futures Abu Dhabi, ICE Endex, Options Clearing Corp, CBOE Futures Exchange, Nodal Clear, Coinbase Derivatives Exchange, and a non-clearing member of EUREX. Advantage maintains carrying broker relationships to facilitate client access to products on exchanges Advantage does not clear directly. Advantage currently maintains such relationships with RBC Capital Markets, LLC, Phillip Capital Inc., Marex North America LLC, Marex Financial, and Nissan Securities Co., Ltd. Client commissions derived from executing and clearing futures and options on futures trades are the primary source of Advantage revenue. Most volume cleared through Advantage is electronically executed by clients. Advantage clears trades for a variety of client types, including professional traders, proprietary trading groups, institutional clients, non-clearing FCMs, hedge funds, and individuals. Advantage clients employ various trading styles, including spreading, relative value, market-making, directional, and high-frequency day trading. Advantage clients are domiciled in 63 different countries, territories, and jurisdictions.

Advantage offers execution services, primarily to institutional clients, via CME Group trading, floor-based and office-based personnel. Advantage allocates most of these trades to other FCMs for clearing. ADM Investor Services provides global execution services for Advantage clients. Trades executed by ADM Investor Services on behalf of Advantage clients are given-up to Advantage for clearing. Advantage hosts technology equipment and provides other technology services for clients.

Advantage does not conduct speculative proprietary trading. Advantage operates an agency model brokerage company and does not trade for its own account (a de minimis amount of Firm capital is used to hedge Firm foreign currency exposure), focusing its resources in support of client business.

The CME Group is the Designated Self-Regulatory Organization (“DSRO”) for Advantage. Addtional information can be obtained on their website http://www.cmegroup.com/clearing/financial-and-regulatory-surveillance.html.

A. Permitted Depositories and Counterparties

Advantage appreciates its responsibility to protect and separately account for funds in both Customer Segregated and Customer Secured 30.7 origins (collectively “segregated funds”). This is necessary to protect both customers and Advantage, as the FCM is ultimately responsible for any loss of segregated or secured 30.7 funds due to their mishandling. To that end, Advantage developed procedures for:

  • Evaluating suitability of depositories designated for holding customer segregated funds;
  • Opening and documenting segregated accounts at approved depositories;
  • Monitoring approved depositories;
  • Establishing appropriate level of FCM residual interest in these segregated accounts, including regular reviews of the suitability of that level;
  • Withdrawing funds from segregated accounts when the withdrawal is not for the benefit of customers;
  • Assessing suitability and appropriate allocation of segregated funds to specific investments permitted per CFTC Rule 1.25.

B. Evaluating the Suitability of Customer Fund Depositories

There are three primary depositories/counterparties holding segregated or secured funds of Advantage customers: banks, carrying brokers, and clearing organizations. Advantage established policies and procedures reasonably designed to ensure institutions holding Advantage deposits of customer segregated funds are financially sound and otherwise appropriate for this purpose.

Criteria utilized in this analysis of banks, carrying brokers and clearing organizations include but are not limited to a review of the following, as applicable:

  • Institutional size and capitalization
  • Creditworthiness
  • Access to liquidity
  • Operational reliability
  • Concentration of segregated funds with any depository or group of depositories
  • Regulatory oversight
  • Outside rating agency opinions
  • Availability of deposit insurance

III. Material Risks

Advantage faces several potential risks in the ordinary course of business, including Credit Risk, Market Risk, Operational Risk, Legal, Regulatory & Compliance Risk, Human Resources Risk, Financial Risk, IT Risk, and Strategic Risk, each defined as follows:

Credit Risk – The risk of loss from failure of client or counterparty to meet financial obligations or default of client or counterparty.

Market Risk – The risk of loss from fluctuations in market prices or changes in market conditions that impact investment values or result in client deficit balances. Also includes foreign currency exposure.

Operational Risk – The risk of loss due to inadequate systems and controls, human error, or management failure.

Legal, Regulatory, & Compliance Risk – The risk of fines, penalties, or reputational damage due to real or perceived noncompliance with laws, rules, regulations, agreements, or failure to meet professional obligations.

Human Resources Risk – The risk of loss due to ineffective hiring/recruitment, loss of key employees, inadequate corporate governance, or legal risks arising from employees.

Financial Risk – The risk of loss or missed business opportunities due to insufficient financial controls, including capital risk, liquidity risk, segregation risk, and accounting risk.

IT Risk – The risks associated with critical systems, technology practices, cybersecurity, business data, and interruption of business activity.

Strategic Risk – The risk of internal or external events that inhibit or prevent Advantage from achieving objectives or damage Advantage reputation.

Advantage does not engage in speculative proprietary trading. Advantage serves clients as an executing broker and clearing firm without a conflict of interest since Advantage is not competing with client trading.

A. Investments Made by the Advantage

Advantage holds significant assets in cash and may also hold US Treasury and US Agency securities guaranteed by the US Government, while ensuring compliance with regulatory capital requirements and maintaining sufficient liquidity to meet ongoing business obligations

Advantage maintains proprietary accounts to hedge Advantage risk exposures, including risk in foreign currency price fluctuation.

Advantage investments of customer funds comply with CFTC Regulation 1.25. As permitted under CFTC regulations, client funds are invested in cash, US Treasury and Agency securities, and Reverse Repurchase Agreements with US Treasury and Agency securities. Advantage daily financial and quarterly investment information can be found on Advantage website www.advantagefutures.com under section About > Financials.

B. Advantage Creditworthiness, Leverage, Capital, Liquidity, Principal Liabilities, Balance Sheet Leverage and Other Lines of Business

Advantage pays its financial obligations in a timely manner and has never failed to meet a payment obligation to an exchange, clearing organization, or carrying broker. When and as needed, Advantage has been able to establish new banking, exchange, and carrying broker relationships. As an LLC and non-publicly held company, Advantage does not have a formal credit rating with major credit rating agencies.

Advantage balance sheet leverage as computed under NFA Financial Requirements Section 16 was 5.06 as of September 30, 2022.

Advantage strives to maintain capital necessary to support business needs and comply with regulatory requirements. As of September 30, 2022, Advantage had Net Capital of $29,348,708, Adjusted Net Capital of $28,561,412 and Excess Net Capital of $16,765,917.

Advantage strives to transparently reflect our liquidity by graphically displaying on our website how we invest Customer Segregated and Customer Secured 30.7 funds. Additional liquidity for Advantage is provided via a $56,000,000 delivery line of credit from one of our bank relationships. If, when, and as additional liquidity may be needed, Advantage will seek equity or debt funding from private sources of capital.

Principal liabilities for Advantage are balances in customer and non-customer accounts. As of September 30, 2022, these comprised 96.53% of Advantage liabilities. Of the remaining liabilities, 1.98% represent liabilities subordinated to claims of general creditors subject to a satisfactory subordination agreement approved by Advantage DSRO. Various other payables and accrued expenses (including compensation and accounts payable) represent the remaining 1.49% of liabilities carried by Advantage as of September 30, 2022.

C. Risks to the Firm Created by its Affiliates

Advantage does not invest customer or house funds with affiliated entities, except to the extent Advantage invests house funds in Advantage Securities.

Advantage Securities is a wholly owned subsidiary of Advantage. Advantage Securities is a registered broker dealer with the Financial Industry Regulatory Authority and the Securities and Exchange Commission. Advantage Securities does not currently conduct any securities business and maintains excess net capital of $66,384 as of September 30, 2022. Although Advantage Securities is a regulated entity with separate policies and procedures in place, parent company Advantage may have financial exposure if the broker dealer became illiquid or required additional capital to support its business activities.

No other affiliates of Advantage pose a material risk to the FCM business.

D. Significant Liabilities and Material Commitments

Advantage has a liability in the form of its sub-sub-lease on its headquarters located at 231 South LaSalle Street, Suite 1400 Chicago, IL. The sub-sub-lease is a non-cancellable operating lease with rental commitments totaling $804,384 beyond October 01, 2022.

E. Summary of Current Risk Practices, Controls and Procedures

Pursuant to CFTC Regulation 1.11(c), Advantage has a Risk Management Program to establish, maintain, and enforce a system of risk management policies and procedures designed to monitor and manage risks associated with Advantage activities. Advantage maintains written policies and procedures describing the Risk Management Program, approved in writing by the Advantage governing body.

Advantage maintains a Risk Management Program Framework which describes the principles, policies, and functional responsibilities for risk management throughout Advantage. The Framework identifies the goals, business context, regulatory background, business model, governance structure, supervision, methodologies, controls, monitoring, reporting, and resources utilized to manage risk.

Advantage maintains Specific Risk Management Policies, which identify various risks Advantage faces and describes how Advantage manages these risks. Advantage categorized risk exposures into Credit Risk, Market Risk, Operational Risk, Legal, Regulatory & Compliance Risk, Human Resources Risk, Financial Risk, IT Risk, and Strategic Risk. Advantage appreciates its business activities present various combinations and concentrations of risks. Advantage Risk Management Program also establishes risk tolerance limits, accounts for risks posed by affiliates and all lines of business and includes policies and procedures for detecting and appropriately escalating breaches of risk tolerance limits.

IV. Customer Funds Segregation

Advantage maintains Specific Risk Management Policies, which identify various risks Advantage faces and describes how Advantage manages these risks. Advantage categorized risk exposures into Credit Risk, Market Risk, Operational Risk, Legal, Regulatory & Compliance Risk, Human Resources Risk, Financial Risk, IT Risk, and Strategic Risk. Advantage appreciates its business activities present various combinations and concentrations of risks. Advantage Risk Management Program also establishes risk tolerance limits, accounts for risks posed by affiliates and all lines of business and includes policies and procedures for detecting and appropriately escalating breaches of risk tolerance limits.

Customer Accounts. FCMs may maintain up to three different types of accounts for customers, depending on the products customers trade:

(i) Customer Segregated Accounts for customers that trade futures and options on futures listed on US futures exchanges;

(ii) 30.7 Accounts for customers that trade futures and options on futures listed on foreign boards of trade; and

(iii) Cleared Swaps Customer Accounts for customers trading swaps that are cleared on a Derivatives Clearing Organization (“DCO”) registered with the CFTC.

The requirement to maintain these separate accounts reflects the different risks posed by the products. Cash, securities and other collateral (collectively, Customer Funds) required to be held in one type of account, e.g., the Customer Segregated Account, may not be commingled with funds required to be held in another type of account, e.g., the 30.7 Account, except as the CFTC may permit by order.

Customer Segregated Account. Funds that customers deposit with an FCM, or that are otherwise required to be held for the benefit of customers, to margin futures and options on futures contracts traded on futures exchanges located in the US, i.e., designated contract markets, are held in a Customer Segregated Account in accordance with section 4d(a)(2) of the Commodity Exchange Act and CFTC Rule 1.20. Customer Segregated Funds held in the Customer Segregated Account may not be used to meet the obligations of the FCM or any other person, including another customer.

Customer Segregated Funds may be commingled in a single account, i.e., a customer omnibus account, and held with: (i) a bank or trust company located in the US; (ii) a bank or trust company located outside the US that has in excess of $1 billion of regulatory capital; (iii) an FCM; or (iv) a DCO. Such commingled accounts must be properly titled to make clear the funds belong to and are being held for the benefit of FCM customers. Unless a customer provides instructions to the contrary, an FCM may hold Customer Segregated Funds only: (i) in the US; (ii) in a money center country;1 or (iii) in the country of origin of the currency.

An FCM must hold sufficient US dollars in the US to meet all US dollar obligations and sufficient funds in each other currency to meet obligations in such currency. Notwithstanding the foregoing, assets denominated in a currency may be held to meet obligations denominated in another currency (other than the US dollar) as follows: (i) US dollars may be held in the US or in money center countries to meet obligations denominated in any other currency; and (ii) funds in money center currencies2 may be held in the US or in money center countries to meet obligations denominated in currencies other than the US dollar.

30.7 Account. Funds that 30.7 Customers deposit with an FCM, or that are otherwise required to be held for the benefit of customers, to margin futures and options on futures contracts traded on foreign boards of trade, i.e., 30.7 Customer Funds, and sometimes referred to as the foreign futures and foreign options secured amount, are held in a 30.7 Account in accordance with Commission Rule 30.7.

Funds required to be held in the 30.7 Account for or on behalf of 30.7 Customers may be commingled in an omnibus account and held with: (i) a bank or trust company located in the US; (ii) a bank or trust company located outside the US that has in excess of $1 billion in regulatory capital; (iii) an FCM; (iv) a DCO; (v) the clearing organization of any foreign board of trade; (vi) a foreign broker; or
(vii) such clearing organization or foreign broker designated depositories. Such commingled account must be properly titled to make clear the funds belong to and are being held for the benefit of the FCM 30.7 Customers. As explained below, CFTC Rule 30.7 restricts the amount of such funds that may be held outside the US.

Customers trading on foreign markets assume additional risks. Laws or regulations will vary depending on the foreign jurisdiction in which the transaction occurs, and funds held in a 30.7 Account outside the US may not receive the same level of protection as Customer Segregated Funds. If a foreign broker carrying 30.7 Customer positions fails, the broker will be liquidated in accordance with the laws of the jurisdiction in which it is organized. Such laws may differ significantly from the US Bankruptcy Code. Return of 30.7 Customer Funds to the US will be delayed and likely will be subject to the costs of administration of the failed foreign broker in accordance with the law of the applicable jurisdiction, as well as possible other intervening foreign brokers, if multiple foreign brokers were used to process the US customer transactions on foreign markets.

If the foreign broker does not fail but the US FCM of the 30.7 Customer fails, the foreign broker may want to assure that appropriate authorization has been obtained before returning the 30.7 Customer Funds to the US FCM trustee, which may delay their return. If both the foreign broker and the US FCM were to fail, potential differences between the trustee for the US FCM and the administrator for the foreign broker, each with independent fiduciary obligations under applicable law, may result in significant delays and additional administrative expenses. Use of foreign brokers by the US FCM to process trades of 30.7 Customers on foreign markets may cause additional delays and administrative expenses.

To reduce potential risk to 30.7 Customer Funds held outside the US, CFTC Rule 30.7 generally provides that an FCM may not deposit or hold 30.7 Customer Funds in permitted accounts outside the US except as necessary to meet margin requirements, including prefunding margin requirements, established by rule, regulation, or order of the relevant foreign boards of trade or foreign clearing organizations, or to meet margin calls issued by foreign brokers carrying the 30.7 Customers’ positions. The rule further provides, to avoid the daily transfer of funds from accounts in the US, an FCM may maintain in accounts located outside of the US an additional amount of up to 20% of the total amount of funds necessary to meet margin and prefunding margin requirements to avoid daily transfers of funds.

Investment of Customer Funds. Section 4d(a)(2) of the Commodity Exchange Act authorizes FCMs to invest Customer Segregated Funds in obligations of the US, in general   obligations of any State or of any political subdivision thereof, and in obligations fully guaranteed as to principal and interest by the US. Section 4d(f) authorizes FCMs to invest Cleared Swaps Customer Collateral in similar instruments.

CFTC Rule 1.25 authorizes FCMs to invest Customer Segregated Funds, Cleared Swaps Customer Collateral and 30.7 Customer Funds in instruments of a similar nature. CFTC rules further provide that FCM may retain gains earned and is responsible for investment losses incurred in connection with the investment of Customer Funds. However, the FCM and customer may agree that FCM will pay customer interest on funds deposited.

Permitted investments include:
(i) Obligations of US and obligations fully guaranteed as to principal and interest by US (US government securities);
(ii) General obligations of any State or of any political subdivision thereof (municipal securities);
(iii) Obligations of any US government corporation or enterprise sponsored by the US government (US agency obligations);
(iv) Certificates of deposit issued by a bank (certificates of deposit) as defined in section 3(a)(6) of the Securities Exchange Act of 1934, or a domestic branch of a foreign bank that carries deposits insured by the Federal Deposit Insurance Corporation (“FDIC”);
(v) Commercial paper fully guaranteed as to principal and interest by the US under the Temporary Liquidity Guarantee Program asadministered by the FDIC (commercial paper);
(vi) Corporate notes or bonds fully guaranteed as to principal and interest by the US under the Temporary Liquidity Guarantee Program as administered by the FDIC (corporate notes or bonds); and
(vii) Interests in money market mutual funds.

The average duration of the securities in which an FCM invests Customer Funds cannot exceed two years.

An FCM may also engage in repurchase and reverse repurchase transactions with non-affiliated registered broker dealers, provided such transactions are made on a delivery versus payment basis and involve only permitted investments. Funds or securities received in repurchase and reverse repurchase transactions with Customer Funds must be held in the appropriate Customer Account, i.e., Customer Segregated Account, 30.7 Account or Cleared Swaps Customer Account. In accordance with the provisions of CFTC Rule 1.25, such funds or collateral must be received in the appropriate Customer Account on a delivery versus payment basis in immediately available funds (NFA publishes a report twice monthly, which displays for each FCM, inter alia, the percentage of Customer Funds that are held in cash and each of the permitted investments under CFTC Rule 1.25. The report also indicates whether the FCM held any Customer Funds during that month at a depository that is an affiliate of the FCM).

Funds deposited with Advantage for trading futures and options on futures contracts on either US or foreign markets are not protected by the Securities Investor Protection Corporation.

CFTC rules require Advantage to hold funds deposited to margin futures and options on futures contracts traded on US designated contract markets in Customer Segregated Accounts.

Advantage must hold funds deposited to margin options on futures contracts traded on foreign boards of trade in a 30.7 Account. In computing its Customer Funds requirements under relevant CFTC rules, Advantage may only consider those Customer Funds actually held in the applicable Customer Accounts and may not apply free funds in an account under identical ownership but of a different classification or account type (e.g. Customer Segregated) to an account’s margin deficiency. In order to be used for margin purposes, the funds must transfer to the identically owned under margined account.

For additional information on the protection of customer funds, please see the Futures Industry Association’s “Protection of Customer Funds Frequently Asked Questions” located at http://www.futuresindustry.org/downloads/PCF-FAQs.PDF.

V. Filing a Complaint

A client may file a complaint directly by contacting the Advantage  Compliance Department at compliance@advantagefutures.com or by calling 312-800-7000.

Additional options include:

A client may file a complaint about Advantage or one of its employees with the CFTC. Contact the Division of Enforcement at https://forms.cftc.gov/Forms/Complaint/Screen1 or call the Division of Enforcement toll-free at 866-FON-CFTC (866-366-2382).

A client may file a complaint about Advantage or one of its employees with the NFA at http://www.nfa.futures.org/basicnet/Complaint.aspx or by calling NFA at 800-621-3570.

A client may file a complaint about Advantage or one of its employees with Advantage DSRO, CME Group, electronically at: http://www.cmegroup.com/market-regulation/file-complaint.html or by calling the CME at 312.341.7970.

VI. Material Complaints or Actions

At any given time, in the normal course of business, Advantage may be involved in or subject to litigation, investigations, arbitration matters or regulatory reviews, which may or may not seek significant damages. Advantage is currently not involved in a litigation matter.

All regulatory actions taken against Advantage by any Exchange, CFTC or NFA are documented and summarized on the NFA website at: http://www.nfa.futures.org/basicnet/CaseInfo.aspx?entityid=0327359&type=reg

As a regulated entity, complaints or actions filed against Advantage are generally accessed by the above link. This section of the disclosure document is updated with any material actions or complaints filed against the FCM not otherwise available on the source provided above.

VII. Relevant Financial Data

Advantage annual audited financial statements are made available on Advantage website at https://www.advantagefutures.com/about/financials/. Also included, are monthly net capital summaries, monthly segregation statements, daily and monthly segregation and secured statements and investment of client funds historical data for a minimum of the past 12 months.

Other Financial data as of September 30, 2022:

                 Total Ownership Equity:              $17,773,234

                 Net Capital:                                $29,348,708

                 Tangible Net Worth:                   $17,051,438

Advantage proprietary margin requirement:

Advantage does not conduct speculative proprietary trading. Advantage does maintain an immaterial margin requirement from time to time which represents open positions which hedge Advantage risk including currency exposure. This margin requirement represented .072% of Advantage aggregate margin requirement for futures customers and non-customers.

* Ten clients represent at least 50% of the FCMs total funds held for futures customers.

* Two clients represent at least 50% of the FCMs total funds held for 30.7 futures customers.

* Advantage does not enter into any principal over-the-counter transactions.

* Advantage does not maintain any unsecured lines of credit or similar short-term funding.

* Advantage does not provide financing for customer transactions involving illiquid financial products.

* Advantage has not written off any new material segregated or secured 30.7 customer receivables as uncollectable during the past 12-month period.

Additional financial information on all FCMs is also available on the CFTC’s website at: http://www.cftc.gov/MarketReports/financialfcmdata/index.htm

Clients should be aware that the NFA publishes certain financial information with respect to each FCM on its website. The Financial Data for FCMs report provides most recent month-end adjusted net capital, required net capital, and excess net capital for each FCM (information dates back to 2002). In addition, NFA publishes a Customer Segregated Funds report twice monthly, which displays for each FCM: (i) total funds held in Customer Segregated Accounts; (ii) total funds required to be held in Customer Segregated Accounts; and (iii) excess segregated funds, i.e., the FCM’s Residual Interest. This report also displays the percentage of Customer Segregated Funds that are held in cash and each of the permitted investments under CFTC Rule 1.25. Finally, the report indicates whether the FCM held any Customer Segregated Funds during that month at a depository that is an affiliate of the FCM.

The report reflects the most recent semi-monthly information, and the public also can see information for the most recent twelve-month period. A 30.7 Customer Funds report and a Customer Cleared Swaps Collateral report provides the same information with respect to the 30.7 Account and the Cleared Swaps Customer Account.

The above financial information reports can be found by conducting a search for a specific FCM in NFA’s BASIC system (http://www.nfa.futures.org/basicnet/) and then clicking on “View Financial Information” on the FCM’s BASIC Details page.

This disclosure document was first used November 1, 2022.



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