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Manning & Napier Advisors MANNING & NAPIER ADVISORS, LLC COMMODITY TRADING ADVISOR DISCLOSURE DOCUMENT Contact Information: MANNING & NAPIER ADVISORS, LLC 353 N. CLARK STREET, SUITE 1950 CHICAGO, ILLINOIS 60654 ATTN: Jay Feuerstein Telephone: 312-873-3100 Facsimile: 312-873-3101 E-mail: [email protected] THE ADVISOR FIRST INTENDS TO USE THIS DISCLOSURE DOCUMENT ON AUGUST 20, 2014. PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS BROCHURE OR ACCOUNT DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION. THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMODITY FUTURES TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS BROCHURE OR ACCOUNT DOCUMENT. RISK DISCLOSURE STATEMENT THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. IN CONSIDERING WHETHER TO TRADE OR TO AUTHORIZE SOMEONE ELSE TO TRADE FOR YOU, YOU SHOULD BE AWARE OF THE FOLLOWING: IF YOU PURCHASE A COMMODITY OPTION YOU MAY SUSTAIN A TOTAL LOSS OF THE PREMIUM AND OF ALL TRANSACTION COSTS. IF YOU PURCHASE OR SELL A COMMODITY FUTURES CONTRACT OR SELL A COMMODITY OPTION OR ENGAGE IN OFF-EXCHANGE FOREIGN CURRENCY TRADING YOU MAY SUSTAIN A TOTAL LOSS OF THE INITIAL MARGIN FUNDS OR SECURITY DEPOSIT AND ANY ADDITIONAL FUNDS THAT YOU DEPOSIT WITH YOUR BROKER TO ESTABLISH OR MAINTAIN YOUR POSITION. IF THE MARKET MOVES AGAINST YOUR POSITION, YOU MAY BE CALLED UPON BY YOUR BROKER TO DEPOSIT A SUBSTANTIAL AMOUNT OF ADDITIONAL MARGIN FUNDS, ON SHORT NOTICE, IN ORDER TO MAINTAIN YOUR POSITION. IF YOU DO NOT PROVIDE THE REQUESTED FUNDS WITHIN THE PRESCRIBED TIME, YOUR POSITION MAY BE LIQUIDATED AT A LOSS, AND YOU WILL BE LIABLE FOR ANY RESULTING DEFICIT IN YOUR ACCOUNT. UNDER CERTAIN MARKET CONDITIONS, YOU MAY FIND IT DIFFICULT OR IMPOSSIBLE TO LIQUIDATE A POSITION. THIS CAN OCCUR, FOR EXAMPLE, WHEN THE MARKET MAKES A “LIMIT MOVE.” THE PLACEMENT OF CONTINGENT ORDERS BY YOU OR YOUR TRADING ADVISOR, SUCH AS A “STOP-LOSS” OR “STOP-LIMIT” ORDER, WILL NOT NECESSARILY LIMIT YOUR LOSSES TO THE INTENDED AMOUNTS, SINCE MARKET CONDITIONS MAY MAKE IT IMPOSSIBLE TO EXECUTE SUCH ORDERS. A “SPREAD” POSITION MAY NOT BE LESS RISKY THAN A SIMPLE “LONG” OR “SHORT” POSITION. THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN COMMODITY INTEREST TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS. IN SOME CASES, MANAGED COMMODITY ACCOUNTS ARE SUBJECT TO SUBSTANTIAL CHARGES FOR MANAGEMENT AND ADVISORY FEES. IT MAY BE NECESSARY FOR THOSE ACCOUNTS THAT ARE SUBJECT TO THESE CHARGES TO MAKE SUBSTANTIAL TRADING PROFITS TO AVOID DEPLETION OR EXHAUSTION OF THEIR ASSETS. THIS DISCLOSURE DOCUMENT CONTAINS, AT PAGE 13, A COMPLETE DESCRIPTION OF EACH FEE TO BE CHARGED TO YOUR ACCOUNT BY THE COMMODITY TRADING ADVISOR. THIS BRIEF STATEMENT CANNOT DISCLOSE ALL THE RISKS AND OTHER SIGNIFICANT ASPECTS OF THE COMMODITY INTEREST MARKETS. YOU SHOULD THEREFORE CAREFULLY STUDY THIS DISCLOSURE DOCUMENT AND COMMODITY INTEREST TRADING BEFORE YOU TRADE, INCLUDING THE DESCRIPTION OF THE PRINCIPAL RISK FACTORS OF THIS INVESTMENT, AT PAGE 7. YOU SHOULD ALSO BE AWARE THAT THIS COMMODITY TRADING ADVISOR MAY ENGAGE IN TRADING FOREIGN FUTURES OR OPTIONS CONTRACTS. TRANSACTIONS ON MARKETS LOCATED OUTSIDE THE UNITED STATES, INCLUDING MARKETS FORMALLY LINKED TO A UNITED STATES MARKET MAY BE SUBJECT TO REGULATIONS WHICH OFFER DIFFERENT OR DIMINISHED PROTECTION. FURTHER, UNITED STATES REGULATORY AUTHORITIES MAY BE UNABLE TO COMPEL THE ENFORCEMENT OF THE RULES OF REGULATORY AUTHORITIES OR MARKETS IN NON-UNITED STATES JURISDICTIONS WHERE YOUR TRANSACTIONS MAY BE EFFECTED. BEFORE YOU TRADE YOU SHOULD INQUIRE ABOUT ANY RULES RELEVANT TO YOUR PARTICULAR CONTEMPLATED TRANSACTIONS AND ASK THE FIRM WITH WHICH YOU INTEND TO TRADE FOR DETAILS ABOUT THE TYPES OF REDRESS AVAILABLE IN BOTH YOUR LOCAL AND OTHER RELEVANT JURISDICTIONS. THIS COMMODITY TRADING ADVISOR IS PROHIBITED BY LAW FROM ACCEPTING FUNDS IN THE TRADING ADVISOR'S NAME FROM A CLIENT FOR TRADING COMMODITY INTERESTS. YOU MUST PLACE ALL FUNDS FOR TRADING IN THIS TRADING PROGRAM DIRECTLY WITH A FUTURES COMMISSION MERCHANT OR RETAIL FOREIGN EXCHANGE DEALER, AS APPLICABLE. TABLE OF CONTENTS THE ADVISOR ................................................................................................................................ 1 CLEARING ARRANGEMENTS ...................................................................................................... 3 INVESTMENT OBJECTIVES AND STRATEGY ............................................................................ 3 PRINCIPAL RISK FACTORS ......................................................................................................... 7 COMPENSATION TO THE ADVISOR.......................................................................................... 13 OPERATING EXPENSES ............................................................................................................. 14 CONFLICTS OF INTEREST; PROPRIETARY TRADING ........................................................... 14 PERFORMANCE DATA FOR TRADING PROGRAM ................................................................. 17 THE ADVISOR Manning & Napier Advisors, LLC, (the “Advisor”), a Delaware limited liability company formed on September 13, 2011, registered on May 6, 2014 with the Commodity Futures Trading Commission as a commodity pool operator and commodity trading advisor and has been a member of the National Futures Association since May 6, 2014. The Advisor is also registered with the Securities and Exchange Commission as a registered investment adviser. The Advisor’s main business address is 290 Woodcliff Drive, Fairport, New York 14450 and its main business telephone number is (585) 325-6880. The Advisor will begin using this Disclosure Document on the date set forth on the cover page. The information and opinions contained herein are subject to change or revision subsequent to the date of this Disclosure Document. The key professionals of the Advisor for the MN Xenon Strategies are Jay Feuerstein and Jeffrey Bolduc. The Advisor may in the future admit additional members. On May 22, 2014 Manning & Napier acquired the business and operations of 2100 Xenon Group, LLC, a Chicago-based investment firm specializing in managed futures and global macro strategies for institutional and individual clients. 2100 Xenon Group, LLC was formed on February 7, 2005, registered on February 21, 2007 with the Commodity Futures Trading Commission as a commodity pool operator and commodity trading advisor and was a member of the National Futures Association since February 21, 2007. Jay R. Feuerstein co-founded Xenon Capital Management, LLC (“Xenon Capital”), an Illinois limited liability company which was the general partner of Xenon Partners L.P., an Illinois limited partnership that operated as a private investment fund, in 2001. Mr. Feuerstein was the Managing Member and Chief Investment Officer of Xenon Capital from its inception until 2007, when the business of Xenon Capital was acquired by 2100 Xenon Group, LLC. Mr. Feuerstein served as the Chief Executive Officer and Chief Investment Officer of 2100 Xenon Group, LLC from 2008 through May 2014, when the business of 2100 Xenon Group, LLC was acquired by the Advisor. He currently serves as the Managing Director of the Alternative Strategies Group of the Advisor. Before founding Xenon Capital, Mr. Feuerstein was a Managing Director/Principal in the Chicago office of Bear Stearns & Co. Inc. (“Bear Stearns”) from 1997 to 2001, working with clients in the hedge fund, mutual fund, insurance and pension areas. Prior to his affiliation with Bear Stearns, Mr. Feuerstein served as Senior Vice President for Paine Webber from 1995 to 1997 following its purchase of Kidder Peabody. From 1992 to 1995 he served as Director of Global Futures Sales and Marketing for Fixed Income at Kidder Peabody. In the first twelve years after he received an MBA from the University of Chicago (1980), Mr. Feuerstein worked in sales, trading and research for Lehman Brothers, Drexel Burnham Lambert, The Chicago Corporation and Conti Commodity Services, Inc. Mr. Feuerstein also has published several articles in Corporate Finance Review, Treasury & Risk Management, The Journal of Futures Markets, The MFA Reporter and the Family Office Exchange. Several of these articles specifically deal with trading strategies, risk management and economic theory. In addition, Mr. Feuerstein has lectured at many professional conferences and educational seminars at institutions such as the University of Chicago Graduate School of Business, Northwestern University’s Kellogg School of Management, Duke University’s Fuqua Graduate School of Business, Chicago Mercantile Exchange, the Chicago Board Options Exchange, Marsh & McLennan and the Chicago Board of Trade. Jeffrey P. Bolduc joined 2100 Xenon Group, LLC in August 2008 as a Senior Quantitative Analyst and now serves as the Portfolio Manager for the Alternative Strategies Group of the Advisor. In this capacity Jeffrey is responsible for researching investments for the futures portfolios. Jeffrey joined Manning & Napier in May 2014 when Manning & Napier acquired
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