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Portfolio > Alternative Investments > Hedge Funds

Ontario Exemption for Morgan Stanley, Traxis

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TORONTO (–The Ontario Securities Commission granted an application by four alternative investment funds associated with Morgan Stanley, for relief from registration requirements relating to trade in commodity futures and options on securities that will be offered primarily outside of Canada but that will be distributed in Ontario through an Ontario-registered dealer.

The applicants are: Morgan Stanley Hedge Fund Partners LP, Morgan Stanley Hedge Fund Partners Cayman Ltd., Morgan Stanley Hedge Fund Partners GP LP and Traxis Partners LLC.

Traxis Partners is a global macro fund established in 2003 by three former Morgan Stanley strategists, Barton Biggs, Cyril Moulle-Berteaux and Madhav Dhar.

Together, the applicants will provide advice with respect to and manage Traxis Fund LP, a master fund that shall have a number of feeder funds, according to the OSC order granting the requested regulatory relief, Aug. 9.

Securities of these feeder funds “will be offered to a small number of Ontario residents who are institutional investors or high-net-worth individuals,” the order said. The relief is granted with the understanding that prospective investors who are residents of the province will receive disclosure that includes (1) a statement that there may be difficulty in enforcing legal rights against the applicable funds or any of the applicants advising the relevant funds, because they are resident outside of Canada and all or substantially all of their assets are situated outside of Canada and (2) a statement that the applicants advising the applicable funds are not registered with or licensed by any securities regulatory authority in Canada and, accordingly, the protections available to clients of a registered adviser will not be available to purchasers of a fund.

All four applicants are registered as commodity pool operators or commodity trading advisers with the U.S. Commodity Futures Trading Commission and the National Futures Association. Three of the applicants (all but Morgan Stanley Cayman) also are registered as investment advisers under the U.S. Investments Advisors Act of 1940.

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Contact Robert F. Keane with questions or comments at: [email protected].


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