UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended March 31, 2005
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________________ to ______________________
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Commission File No. Name of Registrant or Co-Registrant in Charter IRS Employer Number
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333-119612 WORLD MONITOR TRUST III 20-1697966 (Series G)
(Name of Registrant) 20-1698042 (Series H)
20-1698147 (Series I)
20-2446281 (Series J)
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333-119612-01 WMT III SERIES I/J TRADING VEHICLE LLC (Name of 20-2469479
Rule 140 Co-Registrant No. 1)
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333-119612-02 WMT III SERIES H/J TRADING VEHICLE LLC (Name of 20-2469200
Rule 140 Co-Registrant No. 2)
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333-119612-03 WMT III SERIES G/J TRADING VEHICLE LLC (Name of 20-2469369
Rule 140 Co-Registrant No. 3)
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Delaware
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(State or other Jurisdiction of Incorporation or organization of Registrant and Co-Registrants)
51 Weaver Street, Building 1 South, 2nd Floor, Greenwich, Connecticut 06831
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(Address of principal executive offices of Registrant and Co-Registrants) (Zip Code)
Registrant's and Co-Registrants' telephone number, including area code: (203) 861-1000
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes No X
---- ----
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes No X
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WORLD MONITOR TRUST III
QUARTER ENDED MARCH 31, 2005
TABLE OF CONTENTS
______________________
Page
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PART I. FINANCIAL INFORMATION..............................................1
ITEM 1. FINANCIAL STATEMENTS....................................1
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.....................7
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK.......................................9
ITEM 4. CONTROLS AND PROCEDURES.................................9
PART II. OTHER INFORMATION.................................................10
ITEM 1. LEGAL PROCEEDINGS .....................................10
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND
USE OF PROCEEDS........................................10
ITEM 3. DEFAULTS UPON SENIOR SECURITIES........................10
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS....10
ITEM 5. OTHER INFORMATION......................................10
ITEM 6. EXHIBITS...............................................10
SIGNATURES ..................................................................12
EXHIBIT INDEX...............................................................E-1
Exhibit 31.1 Certification of Kenneth A. Shewer................E-2
Exhibit 31.2 Certification of Maureen D. Howley................E-3
Exhibit 32.1 Certification of Kenneth A. Shewer................E-4
Exhibit 32.2 Certification of Maureen D. Howley................E-5
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WORLD MONITOR TRUST III
STATEMENT OF FINANCIAL CONDITION
March 31, 2005
(Unaudited)
_______________
Series G Series H Series I Series J
---------------- ---------------- --------------- ----------------
ASSETS
Cash $1,000 $1,000 $1,000 $1,000
====== ====== ====== ======
UNITHOLDERS' CAPITAL
General Units - 10 General Units of each Series
outstanding $1,000 $1,000 $1,000 $1,000
====== ====== ====== ======
See accompanying notes.
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WORLD MONITOR TRUST III
STATEMENT OF FINANCIAL CONDITION
December 31, 2004
(Audited)
_______________
Series G Series H Series I
----------------------- ---------------------- --------------------
ASSETS
Cash $1,000 $1,000 $1,000
====== ====== ======
UNITHOLDERS' CAPITAL
General Units - 10 General Units of each Series
outstanding $1,000 $1,000 $1,000
====== ====== ======
See accompanying notes.
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Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
-----------------------------------------------------------
A. General Description of the Fund
World Monitor Trust III (the Trust) is a Delaware business trust
organized on September 28, 2004, which has not yet commenced
operations. The Trust intends to engage in the speculative trading
of futures contracts, forward contracts and other derivative
instruments. The Trust consists of four separate and distinct
series ("Series"): Series G, H, I and J. The assets of each Series
will be segregated from the other Series and separately valued.
Each Series will invest in a trading vehicle which, in turn, will
enter into a managed account agreement with its own independent
commodity trading advisor that will manage such Series' assets,
except that Series J will invest in each of the three trading
vehicles in which Series G, H and I will invest. Series J will, in
turn, enter into a managed account agreement with its own advisors
that will manage the portion of the assets of Series J allocated
to such trading vehicles. The assets of Series J will initially be
allocated equally among the advisors of Series G, H and I and
Series J will rebalance its exposure quarterly to maintain an
equal exposure to each advisor.
Each Series is initially divided into two classes: General Units
and Limited Units. The Limited Units will initially be divided
into two sub-classes: the Class I Units and the Class II Units.
The Class I and Class II Units are identical except for the
applicable service fee charged to each Class.
The capital contributions to the Trust as of March 31, 2005, total
$1,000 per Series and were contributed by the Managing Owner.
B. Proposed Public Offering of Units of Beneficial Interest
The Trust filed a registration statement with the Securities and
Exchange Commission offering to sell up to $500,000,000 of Units
of Beneficial Interest. Units will be sold at $100 per Unit during
the initial offering period and at the net asset value per Unit
during the continuing offering period.
C. Regulation
As a registrant with the Securities and Exchange Commission, the
Trust is subject to the regulatory requirements under the
Securities Act of 1933 and the Securities Exchange Act of 1934. As
a commodity investment pool, the Trust will be subject to the
regulations of the Commodity Futures Trading Commission, an agency
of the United States (U.S.) government which regulates most
aspects of the commodity futures industry; rules of the National
Futures Association, an industry self-regulatory organization; and
the requirements of the various commodity exchanges where the
Trust will execute transactions. Additionally, the Trust will be
subject to the requirements of futures commission merchants
(brokers) and interbank market makers through which the Trust will
trade.
D. Method of Reporting
The Trust's statement of financial condition is presented in
accordance with accounting principles generally accepted in the
United States of America, which require the use of certain
estimates made by the Trust's management. Actual results could
differ from these estimates.
E. Investments in Trading Vehicles
Each Series' investment in its respective trading vehicle(s) will
be reported at their net asset values as of the date of the
statement of financial condition. Each Series will record its
proportionate share of the income or loss from the trading
vehicle(s) in its statement of operations.
Once the Trust commences trading, the trading vehicle(s) will
account for investment transactions on the trade date. Gains or
losses will be realized when contracts are liquidated. Net
unrealized gain or loss on open contracts (the difference between
contract trade price and market price) will be reflected in the
trading vehicle(s)'s statement of financial condition in
accordance with Financial Accounting Standards Board
Interpretation No. 39 - "Offsetting of Amounts Related to Certain
Contracts." Any change in net unrealized gain or loss will be
reported in the trading vehicle(s)'s statement of operations.
Brokerage commissions will include other trading fees and will be
charged to expense when contracts are opened.
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F. Income Taxes
The Trust will prepare calendar year U.S. and applicable state
information tax returns and report to the unitholders their
allocable shares of the Trust's income, expenses and trading gains
or losses.
G. Organization and Offering Costs
Organization and initial offering costs (exclusive of the initial
selling fee), estimated to total approximately $700,000, will be
advanced by the Managing Owner. One fourth of such organizational
and initial offering expenses will be reimbursed by each Series,
without interest, in 36 monthly payments during each of the first
36 months of the Continuous Offering Period. In no event shall the
Managing Owner be entitled to reimbursement for such expenses in
an aggregate amount in excess of 2.5% of the aggregate amount of
all subscriptions accepted by the Trust during the Initial
Offering Period and the first 36 months of the Continuous Offering
Period. The Managing Owner also will pay all offering expenses
incurred after the Initial Offering Period ("ongoing offering
costs"). Such expenses will be allocated among the Series as the
Managing Owner determines to be fair and equitable and, each
Series will reimburse the Managing Owner, without interest, in up
to 36 monthly payments during each of the first 36 months
following the month in which such expenses were paid by the
Managing Owner. In no event shall the amount of any payment in any
month for reimbursement of organization and initial offering costs
and ongoing offering costs exceed 0.50% per annum of the Net Asset
Value of the Trust as of the beginning of such month.
Each Series will only be liable for payment of organization,
initial offering and ongoing offering costs on a monthly basis. If
a Series terminates prior to completion of payment of such amounts
to the Managing Owner, the Managing Owner will not be entitled to
any additional payments, and the Series will have no further
obligation to the Managing Owner.
H. Allocations
Income or loss from each Series will be allocated pro rata to each
unitholder in the Series. Each unitholder within each Class of the
Series will be charged its applicable service fee.
Note 2. MANAGING OWNER
--------------
The Managing Owner of the Trust is Preferred Investment Solutions Corp.,
which conducts and manages the business of the Trust. The Declaration of
Trust and Trust Agreement requires the Managing Owner to maintain a
capital account equal to 1% of the total capital accounts of the Series
(subject to a $100,000 minimum per Series).
The Managing Owner will be paid a monthly management fee of 1/12 of 0.5%
(0.5% annually) of each Series' net asset value at the beginning of the
month.
Note 3. COMMODITY TRADING ADVISORS
--------------------------
Series G has entered into an advisory agreement with Graham Capital
Management, L.P., pursuant to which Series G will pay a monthly
management fee equal to 1/12 of 2.5% (2.5% annually) of the Series G Net
Asset Value. Series H has entered into an advisory agreement with
Bridgewater Associates, Inc., pursuant to which Series H will pay a
monthly management fee equal to 1/12 of 3% (3% annually) of the Series H
Net Asset Value. Series I has entered into an advisory agreement with
Eagle Trading Systems Inc. pursuant to which Series I will pay a monthly
management fee equal to 1/12 of 2% (2% annually) of the Series I Net
Asset Value.
Series J has entered into advisory agreements with Graham Capital
Management, L.P., Bridgewater Associates, Inc. and Eagle Trading Systems
Inc. pursuant to which Series J will pay each of its advisors a monthly
management fee as described above on that portion of the assets of
Series J under the management of each such advisor.
Each Series will also pay the commodity trading advisors an incentive
fee of 20% of New High Net Trading Profits (as defined in the applicable
advisory agreement) generated by such Series, except that Series J will
pay such incentive fee separately with respect to each of its advisors
based on "New High Net Trading Profits" generated by such advisor,
regardless of the profitability of Series J as a whole. Incentive fees
will accrue monthly and be paid quarterly in arrears.
Note 4. SERVICE FEES AND SALES COMMISSIONS
----------------------------------
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The Trust will pay a service fee with respect to Class I units, monthly
in arrears, equal to 1/12 of 2% ( 2% per annum) of the Net Asset Value
per unit of the outstanding Class I units as of the beginning of the
month. The service fee will be paid directly by the Trust to the Selling
Agent, Kenmar Securities, Inc., an affiliate of the Managing Owner. The
Selling Agent will be responsible for paying all commissions owing to
the correspondent selling agents, who will be entitled to receive from
the Selling Agent an initial commission equal to 2% of the initial Net
Asset Value per Unit of each Class I unit sold by them, payable on the
date such Class I units are purchased and, commencing with the 13th
month after the purchase of a Class I unit, an ongoing monthly
commission equal to 1/12th of 2% (2% per annum) of the Net Asset Value
per unit as of the beginning of the month of the Class I units sold by
them.
Class II unitholders will not be assessed service fees.
All unitholders will also pay Kenmar Securities Inc. a monthly sales
commission equal to 1/12 of 1% (1% annually) of the Net Asset Value of
the outstanding units as of the beginning of each month.
Note 5. TRUSTEE
-------
The trustee of the Trust is Wilmington Trust Company, a Delaware banking
company. The trustee has delegated to the Managing Owner the duty and
authority to manage the business and affairs of the Trust and has only
nominal duties and liabilities with respect to the Trust.
Note 6. OPERATING EXPENSES
------------------
Operating expenses of the Trust will be paid for by the Trust.
Note 7. SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS
--------------------------------------------
Investments in the Trust will be made by subscription agreement, subject
to acceptance by the Managing Owner.
The Trust is not required to make distributions, but may do so at the
sole discretion of the Managing Owner. A unitholder may request and
receive redemption of Units owned, subject to restrictions in the
Declaration of Trust and Trust Agreement.
Class I unitholders who redeem all or a portion of their units of any
Series on or prior to the first anniversary of their purchase will be
subject to a redemption charge of up to 2% of the purchase price of such
units to reimburse Kenmar Securities, Inc. for the unreimbursed amount
of the initial service fee in respect of such redeemed units which was
previously advanced by Kenmar Securities, Inc. There is no redemption
charge associated with the Class II units.
Note 8. TRADING ACTIVITIES AND RELATED RISKS
------------------------------------
The Trust intends to engage in the speculative trading of futures
contracts, options on futures contracts and forward contracts
(collectively, "derivatives") through the trading vehicles. The Trust
will be exposed to both market risk, the risk arising from changes in
the market value of the contracts, and credit risk, the risk of failure
by another party to perform according to the terms of a contract.
Purchases and sales of futures and options on futures contracts require
margin deposits with the brokers. Additional deposits may be necessary
for any loss of contract value. The Commodity Exchange Act requires a
broker to segregate all customer transactions and assets from such
broker's proprietary activities. A customer's cash and other property
(for example, U.S. Treasury bills) deposited with a broker are
considered commingled with all other customer funds subject to the
broker's segregation requirements. In the event of a broker's
insolvency, recovery may be limited to a pro rata share of segregated
funds available. It is possible that the recovered amount could be less
than total cash and other property deposited.
The Trust will have cash and cash equivalents on deposit with interbank
market makers and other financial institutions in connection with its
trading of forward contracts and its cash management activities. In the
event of a financial institution's insolvency, recovery of Trust assets
on deposit may be limited to account insurance or other protection
afforded such deposits. Since forward contracts are traded in
unregulated markets between principals, the Trust will also assume the
risk of loss from counterparty nonperformance.
For derivatives, risks arise from changes in the market value of the
contracts. Theoretically, the Trust will be exposed to a market risk
equal to the notional contract value of futures and forward contracts
purchased and unlimited liability on such contracts sold short. As both
a buyer and seller of options, the Trust will pay or receive a premium
at the outset and then bear the risk of unfavorable changes in the price
of the contract underlying the
-5-
option. Written options will expose the Trust to potentially unlimited
liability, and purchased options will expose the Trust to a risk of loss
limited to the premiums paid.
The Managing Owner has established procedures to actively monitor market
risk and minimize credit risk, although there can be no assurance that
it will, in fact, succeed in doing so. The Unitholders will bear the
risk of loss only to the extent of the market value of their respective
investments and, in certain specific circumstances, distributions and
redemptions received.
Note 9. GUARANTEES
----------
In the normal course of business, the Trust enters into contracts and
agreements that contain a variety of representations and warranties and
which provide general indemnifications. The Trust's maximum exposure
under these arrangements is unknown, as this would involve future claims
that may be made against the Trust that have not yet occurred. The Trust
expects the risk of any future obligation under these indemnifications
to be remote.
Note 10. INTERIM FINANCIAL STATEMENTS
----------------------------
The statement of financial condition as of March 31, 2005 is unaudited.
In the opinion of management, such financial statement reflects all
adjustments, which were of a normal and recurring nature, necessary for
a fair presentation of financial position as of March 31, 2005.
-6-
WORLD MONITOR TRUST III
(a Delaware Business Trust)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Report includes forward-looking statements that reflect the
Managing Owner's current expectations about the future results,
performance, prospects and opportunities of the Trust. The Managing
Owner has tried to identify these forward-looking statements by using
words such as "may," "will," "expect," "anticipate," "believe,"
"intend," "should," "estimate" or the negative of those terms or similar
expressions. These forward-looking statements are based on information
currently available to the Managing Owner and are subject to a number of
risks, uncertainties and other factors, both known, such as those
described in this Report, and unknown, that could cause the Trust's
actual results (upon commencement of trading), performance, prospects or
opportunities to differ materially from those expressed in, or implied
by, these forward-looking statements.
You should not place undue reliance on any forward-looking statements.
Except as expressly required by the Federal securities laws, the
Managing Owner undertakes no obligation to publicly update or revise any
forward-looking statements or the risks, uncertainties or other factors
described in this Report, as a result of new information, future events
or changed circumstances or for any other reason after the date of this
Report.
Introduction
World Monitor Trust III, or the Trust, was formed as a Delaware
statutory trust on September 28, 2004, with separate series, or each, a
Series, of units of beneficial interest, or the Units. Its term will
expire on December 31, 2054 (unless terminated earlier in certain
circumstances).
The Trust's Units will initially be offered in four (4) separate and
distinct Series: Series G, Series H, Series I, and Series J. The Trust
may issue future Series of Units. The Units of each Series will be
separated into two classes, or each, a Class, of Units. The Trust, with
respect to each Series, will:
o engage in the speculative trading of a diversified portfolio of
futures, forward (including interbank foreign currencies) and
options contracts and other derivative instruments and may, from
time to time, engage in cash and spot transactions;
o invest in a trading vehicle which, in turn, will enter into a
managed account agreement with its own independent commodity
trading advisor, or each, an Advisor, that will manage such
Series' assets and make the trading decisions in respect of the
assets of such Series, except that Series J will invest in each of
the three trading vehicles in which Series G, Series H and Series
I will invest, each of which, in turn, will enter into a managed
account agreement with its own Advisor that will manage the
portion of the assets of Series J allocated to such trading
vehicle and make the trading decisions in respect of the assets of
Series J allocated to such trading vehicle;
o segregate its assets from the assets of any other Series and
maintain separate, distinct records from each other Series, and
account for its assets separately from each other Series;
o calculate its net assets and the Net Asset Value of its Units
separately from each other Series;
o have an investment objective of increasing the value of its Units
over the long term (capital appreciation), while controlling risk
and volatility; and
o offer Units in two Classes--Class I and Class II.
Class I Units and Class II Units:
o The Trust will pay a Service Fee in respect of the Class I Units,
monthly in arrears, equal to 1/12th of 2.00% (2.00% per annum) of
the Net Asset Value per Unit of the outstanding Class I Units as
of the beginning of the month. The Service Fee will be paid
directly by the Trust to the Selling Agent. The Selling Agent will
then be responsible for paying all service fees owing to the
Correspondent Selling Agents. The Correspondent Selling Agents are
entitled to receive from the Selling Agent an initial service fee
equal to 2.00% of the initial Net Asset Value per Unit of each
Class I Unit sold by them, payable on the date such Class I Units
are purchased and, commencing with the thirteenth month after the
purchase of a Class I Unit, an ongoing monthly commission equal to
1/12th of 2.00% (2.00% per annum) of the Net Asset Value per Unit
as of the beginning of the month of the Class I Units sold by
them. In addition to the above Service Fee, the Trust will pay to
the Selling Agent a
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Sales Commission, monthly in arrears, equal to 1/12th of 1.00%
(1.00% per annum) of the Net Asset Value per Unit of the
outstanding Class I Units as of the beginning of the month.
o Class II Units may only be offered to investors who are
represented by approved Correspondent Selling Agents who are
directly compensated by the investor for services rendered in
connection with an investment in the Trust (such arrangements
commonly referred to as "wrap-accounts"). Investors who purchase
Class II Units of any Series will not be charged any Service Fee.
However, the Trust will pay to the Selling Agent a Sales
Commission, monthly in arrears, equal to 1/12th of 1.00% (1.00%
per annum) of the Net Asset Value per Unit of the outstanding
Class II Units as of the beginning of the month.
Units of each Series will initially be offered for a period ending July
1, 2005 unless (i) the subscription minimum for such Series is reached
before that date or (ii) such date is extended by Preferred Investment
Solutions Corp., the Managing Owner, for up to an additional ninety (90)
days.
After trading commences, Units in each Series will be offered as of the
beginning of each month and will be offered continuously until all of
each Series' Units which are registered are sold. The Managing Owner may
terminate the Continuous Offering Period at any time.
Critical Accounting Policies
Preparation of the financial statements and related disclosures in
compliance with accounting principles generally accepted in the United
States of America requires the application of appropriate accounting
rules and guidance, as well as the use of estimates. The Trust's
application of these policies involves judgments and actual results may
differ from the estimates used.
The Managing Owner has evaluated the nature and types of estimates that
it will make in preparing the Trust's financial statements and related
disclosures once the Trust begins trading operations and has determined
that the valuation of its investments which are not traded on a United
States or internationally recognized futures exchange involves a
critical accounting policy. While not currently applicable given the
fact that the Trust is not currently involved in trading activities, the
values which will be used by the Trust for its open forward positions
will be provided by its commodity broker who will use market prices when
available, while over-the-counter derivative financial instruments,
principally forwards, options and swaps will be valued based on the
present value of estimated future cash flows that would be received from
or paid to a third party in settlement of these derivative contracts
prior to their delivery date.
Liquidity and Capital Resources
As of March 31, 2005, the Trust has not begun trading activities. Once
the Trust begins trading activities, it is anticipated that all of its
total net assets will be allocated to commodities trading through the
trading vehicles. A significant portion of the net asset value is likely
to be held in U.S. Treasury bills and cash, which will be used as margin
for the Trust's trading in commodities. The percentage that U.S.
Treasury bills will bear to the total net assets will vary from period
to period as the market values of commodity interests change. The
balance of the net assets will be held by the Trust in the trading
vehicles' commodity trading accounts. Interest earned on
interest-bearing funds will be paid to the Trust.
The Trust's commodity contracts will be subject to periods of
illiquidity because of market conditions, regulatory considerations and
other reasons. For example, commodity exchanges limit fluctuations in
certain commodity futures contract prices during a single day by
regulations referred to as "daily limits." During a single day, no
trades may be executed at prices beyond the daily limit. Once the price
of a futures contract for a particular commodity has increased or
decreased by an amount equal to the daily limit, positions in the
commodity can neither be taken nor liquidated unless the traders are
willing to effect trades at or within the limit. Commodity futures
prices have occasionally moved the daily limit for several consecutive
days with little or no trading. Such market conditions could prevent the
Trust from promptly liquidating its commodity futures positions.
Since the Trust will trade futures and forward contracts through the
trading vehicles, its capital will be at risk due to changes in the
value of these contracts (market risk) or the inability of
counterparties to perform under the terms of the contracts (credit
risk).
The Trust does not have, nor does it expect to have, any capital assets.
-8-
Off-Balance Sheet Arrangements and Contractual Obligations
As of March 31, 2005, the Trust has not utilized, nor does it expect to
utilize in the future, special purpose entities to facilitate
off-balance sheet financing arrangements and has no loan guarantee
arrangements or off-balance sheet arrangements of any kind other than
agreements entered into in the normal course of business, which may
include indemnification provisions related to certain risks service
providers undertake in performing services which are in the best
interests of the Trust. While the Trust's exposure under such
indemnification provisions cannot be estimated, these general business
indemnifications are not expected to have a material impact on the
Trust's financial position.
The Trust's contractual obligations are with the Managing Owner, the
Advisors and its commodity brokers. Payments made under the Trust's
agreement with the Advisors are a fixed rate, calculated as a percentage
of each trading vehicle's "New High Net Trading Profits." In addition,
Management Fee payments to the Advisors and fees paid to the Managing
Owner are calculated as a fixed percentage of each trading vehicle's Net
Asset Value. As such, the Managing Owner cannot anticipate the amount of
payments that will be required under these arrangements for future
periods as Net Asset Values are not known until a future date.
Commission payments to the commodity broker are based on a cost per
executed trade and, as such, the Managing Owner cannot anticipate the
amount of such payments that will be required under the brokerage
agreement for future periods as the level of executed trades are not
known until a future date These agreements are effective for one year
terms, renewable automatically for additional one year terms unless
terminated. Additionally, these agreements may be terminated by either
party for various reasons.
Results of Operations
Through March 31, 2005, the Trust has not yet commenced operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information regarding quantitative and qualitative disclosures about
market risk is not required pursuant to Item 305(e) of Regulation S-K.
ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, the Managing Owner
carried out an evaluation, under the supervision and with the
participation of the officers of the Managing Owner, including the
Managing Owner's co-chief executive officer and chief financial officer,
of the effectiveness of the design and operation of the Trust's
disclosure controls and procedures. Based upon that evaluation, the
Managing Owner's co-chief executive officer and chief financial officer
concluded that the Trust's disclosure controls and procedures are
effective.
In designing and evaluating the Trust's disclosure controls and
procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Exchange
Act), the Managing Owner recognized that any controls and procedures, no
matter how well designed and operated, can provide only reasonable
assurances of achieving the desired control objectives, as ours are
designed to do, and the Managing Owner necessarily was required to apply
its judgment in evaluating the cost-benefit relationship of possible
controls and procedures. We believe that our disclosure controls and
procedures provide such reasonable assurance.
There have not been any changes in our internal controls over financial
reporting (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended) during the fiscal quarter
to which this report relates that have materially affected, or are
reasonably likely to materially affect, our internal controls over
financial reporting.
-9-
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS - THERE ARE NO MATERIAL LEGAL PROCEEDINGS
PENDING BY OR AGAINST THE REGISTRANT OR THE MANAGING OWNER OR FOR
WHICH THE REGISTRANT OR THE MANAGING OWNER WAS A PARTY DURING THE
PERIOD COVERED BY THIS REPORT.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS - NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - NONE
ITEM 5. OTHER INFORMATION - NONE
ITEM 6. EXHIBITS:
1.1 Form of Selling Agreement (incorporated by reference to Exhibit
1.1 to the Trust's Pre-Effective Amendment No. 2 on S-1
Registration Statement, File No. 333-119612, filed with the
Commission on March 14, 2005)
4.1 Amended and Restated Declaration of Trust and Trust Agreement of
the Registrant (annexed to the Prospectus as Exhibit A and
incorporated by reference to Exhibit 4.1 to the Trust's
Pre-Effective Amendment No. 3 on S-1 Registration Statement, File
No. 333-119612, filed with the Commission on March 29, 2005)
Form of Request for Redemption (annexed to Exhibit A) Form of
Exchange Request for Class I Units of Beneficial Ownership
(annexed to Exhibit A) Form of Exchange Request for Class II Units
of Beneficial Ownership (annexed to Exhibit A)
4.2 Subscription Requirements (annexed to the Prospectus as Exhibit B
and incorporated by reference to Exhibit 4.2 to the Trust's
Pre-Effective Amendment No. 3 on S-1 Registration Statement, File
No. 333-119612, filed with the Commission on March 29, 2005)
4.3 Subscription Instructions, Form of Subscription Agreement and
Power of Attorney (annexed to the Prospectus as Exhibit C and
incorporated by reference to Exhibit 4.3 to the Trust's
Pre-Effective Amendment No. 3 on S-1 Registration Statement, File
No. 333-119612, filed with the Commission on March 29, 2005)
4.4 Form of Privacy Notice (annexed to the Prospectus as Exhibit D and
incorporated by reference to Exhibit 4.4 to the Trust's
Pre-Effective Amendment No. 3 on S-1 Registration Statement, File
No. 333-119612, filed with the Commission on March 29, 2005)
10.1 Form of Subscription Escrow Agreement (incorporated by reference
to Exhibit 10.1 to the Trust's Pre-Effective Amendment No. 2 on
S-1 Registration Statement, File No. 333-119612, filed with the
Commission on March 14, 2005)
10.2 Form of Advisory Agreement among WMT III Series G/J Trading
Vehicle LLC, Preferred Investment Solutions Corp. (the "Managing
Owner") and Graham Capital Management, L.P. (incorporated by
reference to Exhibit 10.2 to the Trust's Pre-Effective Amendment
No. 2 on S-1 Registration Statement, File No. 333-119612, filed
with the Commission on March 14, 2005)
10.3 Form of Advisory Agreement among WMT III Series H/J Trading
Vehicle LLC, the Managing Owner and Bridgewater Associates, Inc.
(incorporated by reference to Exhibit 10.3 to the Trust's
Pre-Effective Amendment No. 2 on S-1 Registration Statement, File
No. 333-119612, filed with the Commission on March 14, 2005)
10.4 Form of Advisory Agreement among WMT III Series I/J Trading
Vehicle LLC, the Managing Owner and Eagle Trading Systems Inc.
(incorporated by reference to Exhibit 10.4 to the Trust's
Pre-Effective Amendment No. 2 on S-1 Registration Statement, File
No. 333-119612, filed with the Commission on March 14, 2005)
-10-
10.5 Form of Customer Agreement between the World Monitor Trust III and
UBS Securities LLC (incorporated by reference to Exhibit 10.5 to
the Trust's Pre-Effective Amendment No. 2 on S-1 Registration
Statement, File No. 333-119612, filed with the Commission on March
14, 2005)
31.1 Certification pursuant to Exchange Act Rules 13a-14 and 15d-14
(filed herewith)
31.2 Certification pursuant to Exchange Act Rules 13a-14 and 15d-14
(filed herewith)
32.1 Certification pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the SARBANES-OXLEY Act of 2002
(furnished herewith)
32.2 Certification pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the SARBANES-OXLEY Act of 2002
(furnished herewith)
-11-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
WORLD MONITOR TRUST III
By: Preferred Investment Solutions Corp.
Managing Owner
By: /s/ Kenneth A. Shewer Date: May 16, 2005
----------------------------------------------------
Kenneth A. Shewer
Co-Chief Executive Officer
WORLD MONITOR TRUST III
By: Preferred Investment Solutions Corp.
Managing Owner
By: /s/ Maureen D. Howley Date: May 16, 2005
----------------------------------------------------
Maureen D. Howley
Senior Vice President and Chief Financial Officer
WMT III SERIES G/J TRADING VEHICLE LLC
By: World Monitor Trust III - Series G, a member
By: Preferred Investment Solutions Corp.
Managing Owner
By: /s/KENNETH A. SHEWER Date: May 16, 2005
-----------------------------------
Kenneth A. Shewer
Co-Chief Executive Officer
By: World Monitor Trust III - Series J, a member
By: Preferred Investment Solutions Corp.
Managing Owner
By: /s/KENNETH A. SHEWER Date: May 16, 2005
-----------------------------------
Kenneth A. Shewer
Co-Chief Executive Officer
WMT III SERIES H/J TRADING VEHICLE LLC
By: World Monitor Trust III - Series H, a member
By: Preferred Investment Solutions Corp.
Managing Owner
By: /s/KENNETH A. SHEWER Date: May 16, 2005
-----------------------------------
Kenneth A. Shewer
Co-Chief Executive Officer
By: World Monitor Trust III - Series J, a member
By: Preferred Investment Solutions Corp.
Managing Owner
By: /s/KENNETH A. SHEWER Date: May 16, 2005
-----------------------------------
Kenneth A. Shewer
Co-Chief Executive Officer
WMT III SERIES I/J TRADING VEHICLE LLC
By: World Monitor Trust III - Series I, a member
-12-
By: Preferred Investment Solutions Corp.
managing owner
By: /s/KENNETH A. SHEWER Date: May 16, 2005
-----------------------------------
Kenneth A. Shewer
Co-Chief Executive Officer
By: World Monitor Trust III - Series J, a member
By: Preferred Investment Solutions Corp.
managing owner
By: /s/KENNETH A. SHEWER Date: May 16, 2005
-----------------------------------
Kenneth A. Shewer
Co-Chief Executive Officer
-13-
EXHIBIT INDEX
Page
Exhibit Number Description of Document Number
31.1 Certification of Kenneth A. Shewer E-2
31.2 Certification of Maureen D. Howley E-3
32.1 Certification of Kenneth A. Shewer, Co-Chief Executive Officer, pursuant to 18 U.S.C. E-4
Section 1350, as enacted by Section 906 of The Sarbanes-Oxley Act of 2002
32.2 Certification of Maureen D. Howley, Senior Vice President and Chief Financial Officer, E-5
pursuant to 18 U.S.C. Section 1350, as enacted by Section 906 of The Sarbanes-Oxley Act of
2002
E-1