UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2012 or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________to__________________

Commission File Number: 0-26340

	MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.
	(Exact name of registrant as specified in its charter)

	Delaware	13-3782232
	(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Ceres Managed Futures LLC
522 Fifth Avenue, 14th Floor
New York, NY		10036
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code

(855) 672-4468

(Former name, former address and former fiscal year, if changed since last report)

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 x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer x	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes 0 No T

MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

~~June~~September 30, 2012

	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Statements of Financial Condition as of June 30, 2012 and December 31, 2011	2
	Statements of Financial Condition as of September 30, 2012 and December 31, 2011	2
	Condensed Schedule of Investments as of June 30, 2012	3
	Condensed Schedule of Investments as of September 30, 2012	3
	Condensed Schedule of Investments as of December 31, 2011	4
	Statements of Income and Expenses for the Three and Six Months Ended June 30, 2012 and 2011	5
	Statements of Income and Expenses for the Three and Nine Months Ended September 30, 2012 and 2011	5
	Statements of Changes in Partners’ Capital for the Six Months Ended June 30, 2012 and 2011	6
	Statements of Changes in Partners’ Capital for the Nine Months Ended September 30, 2012 and 2011	6
	Notes to Financial Statements	7-24
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25-34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3435-41
Item 4.	Controls and Procedures	42
	PART II. OTHER INFORMATION
Item 1.	Legal ~~Proceeding~~Proceedings	43-5146
Item 1A.	Risk Factors	5146-6947
Item 4.	Mine Safety Disclosures	6947
Item 6.	Exhibits	70
Item 5.	Other Information	47-48
Item 6.	Exhibits	48-49

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

	June 30,	December 31,
	September 30,	December 31,
	2012	2011
ASSETS	$	$
Trading Equity:
Unrestricted cash	10,~~604~~617,~~076~~611	12,202,453
Restricted cash	1878,~~093,813~~756	989,964
Total cash	11,~~697~~496,~~889~~367	13,192,417
Net unrealized gain on open contracts (MS&Co.)	1,~~047~~010,~~944~~918	1,186,221
Net unrealized gain on open contracts (MSIP)	8,493	34,556
Net unrealized gain (loss) on open contracts (MSIP)	(24,814)	34,556
Total net unrealized gain on open contracts	1986,~~056,437~~104	1,220,777
Options purchased (premiums paid $12,172 and $1,737, respectively)	7,801	814
Options purchased (premiums paid $0 and $1,737, respectively)	–	814
Total Trading Equity	12,~~762~~482,~~127~~471	14,414,008
Interest receivable (MSSB)	548	49
Interest receivable (MS&Co. & MSSB)	877	49
Total Assets	12,~~762~~483,~~675~~348	14,414,057
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
Redemptions payable	~~118~~202,~~173~~844	273,368
Accrued brokerage fees (MS&Co.)	4948,~~456~~491	54,606
Options written (premiums received $21,718 and $0, respectively)	34,809	–
Accrued management fees	15,712	17,799
Accrued management fees	15,907	17,799
Options written (premiums received $13,616 and $0, respectively)	9,266	–
Total Liabilities	~~218~~276,~~345~~313	345,773
Partners’ Capital:
Limited Partners (860,385.075 and 936,792.541 Units, respectively)	12,369,618	13,888,123
Limited Partners (827,698.779 and 936,792.541 Units, respectively)	12,030,404	13,888,123
General Partner (12,152.331 and 12,152.331Units, respectively)	174,712	180,161
General Partner (12,152.331 and 12,152.331 Units, respectively)	176,631	180,161
Total Partners’ Capital	12,~~544~~207,~~330~~035	14,068,284
Total Liabilities and Partners’ Capital	12,~~762~~483,~~675~~348	14,414,057
NET ASSET VALUE PER UNIT	14.3853	14.83

The accompanying notes are an integral part of these financial statements.

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MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

CONDENSED SCHEDULE OF INVESTMENTS

~~June~~September 30, 2012 (Unaudited)

Futures and Forward Contracts Purchased	Net unrealized gain/(loss) on open contracts	% of Partners’ Capital
	$
Commodity	72(15,~~891~~855)	(0.5813)
Equity	60(18,~~631~~503)	(0.4815)
Foreign currency	2011,~~358~~493	0.1609
Interest rate	62118,~~991~~641	0.5097
Total Futures and Forward Contracts Purchased	~~216~~95,~~871~~776	10.7278
Futures and Forward Contracts Sold
Commodity	(2913,~~425~~607)	(0.2411)
Equity	13,~~945~~550	0.0203
Foreign currency	~~(21~~7,~~752)~~397	(0.~~17)~~06
Interest rate	(411,~~232~~760)	(0.0309)
Total Futures and Forward Contracts Sold	(5314,~~464~~420)	(0.4211)
Unrealized Currency Gain	~~893~~904,~~030~~748	7.1241
Net fair value	1986,~~056,437~~104	8.4208

Options Contracts	Fair Value	% of Partners’ Capital
	$
Options purchased on Forward Contracts	7,801	0.06
Options written on Future Contracts	(9,266)	(0.08)
Options written on Futures Contracts	(34,809)	(0.28)

The accompanying notes are an integral part of these financial statements.

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MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

CONDENSED SCHEDULE OF INVESTMENTS

December 31, 2011

Futures and Forward Contracts Purchased	Net unrealized gain/(loss) on open contracts	% of Partners’ Capital
	$
Commodity	(15,932)	(0.11)
Equity	5,601	0.04
Foreign currency	4,129	0.03
Interest rate	68,092	0.48

Total Futures and Forward Contracts Purchased	61,890	0.44


Futures and Forward Contracts Sold

Commodity	211,973	1.51
Equity	2,015	0.01
Foreign currency	33,472	0.24
Interest rate	16,565	0.12

Total Futures and Forward Contracts Sold	264,025	1.88

Unrealized Currency Gain	894,862	6.36

Net fair value	1,220,777	8.68

Options Contracts	Fair Value	% of Partners’ Capital
	$
Options purchased on Future Contracts	814	– (1)

(1) Amounts less than 0.005%

The accompanying notes are an integral part of these financial statements.

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MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

STATEMENTS OF INCOME AND EXPENSES

(Unaudited)

	For the Three Months Ended June 30,		For the Six Months Ended June 30,
	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2012	2011	2012	2011
	$	$	$	$
INVESTMENT INCOME
Interest income (MSSB)	2,121	980	3,963	6,382
Interest income (MS&Co. & MSSB)	2,836	692	6,799	7,074
EXPENSES
Brokerage fees (MS&Co.)	~~151~~145,~~070~~995	~~195~~182,~~940~~410	~~311~~457,~~681~~676	~~412~~594,~~208~~618
Management fees	4847,~~567~~200	6358,~~009~~697	~~100~~147,~~463~~663	~~132~~191,~~736~~433
Total Expenses	~~199~~193,~~637~~195	~~258~~241,~~949~~107	~~412~~605,~~144~~339	~~544~~786,~~944~~051
NET INVESTMENT LOSS	(~~197~~190,~~516~~359)	(~~257~~240,~~969~~415)	(~~408~~598,~~181~~540)	(~~538~~778,~~562~~977)
TRADING RESULTS
Trading profit (loss):
Net realized	~~(109~~383,~~564)~~271	~~(485~~274,~~948)~~656	~~189~~572,~~605~~876	(1949,~~223,860~~204)
Net change in unrealized	3(48,~~875~~521)	~~(47~~249,~~994)~~341	(~~180~~229,~~879~~400)	(~~514~~264,~~182~~841)
Total Trading Results	~~(105~~334,~~689)~~750	~~(533~~523,~~942)~~997	8343,~~726~~476	(1,~~738~~214,~~042~~045)
NET LOSS	(303,205)	(791,911)	(399,455)	(2,276,604)
NET INCOME (LOSS)	144,391	283,582	(255,064)	(1,993,022)
NET LOSS ALLOCATION
NET INCOME (LOSS) ALLOCATION
Limited Partners	~~(299~~142,~~062)~~472	~~(782~~280,~~927)~~417	(~~394~~251,~~006~~534)	(21,~~251~~971,~~577~~160)
General Partner	(41,~~143)~~919	(83,~~984)~~165	(53,~~449~~530)	(2521,~~027~~862)
NET LOSS PER UNIT *
NET INCOME (LOSS) PER UNIT *
Limited Partners	(0.~~34)~~15	(0.~~74)~~26	(0.4530)	(21.0680)
General Partner	(0.~~34)~~15	(0.~~74)~~26	(0.4530)	(21.0680)
	Units	Units	Units	Units
WEIGHTED AVERAGE NUMBER
OF UNITS OUTSTANDING	~~896~~862,~~674~~998.~~555~~961	1,~~083~~033,~~283~~292.~~727~~482	~~917~~899,~~468~~179.~~900~~724	1,~~104~~080,~~268~~349.~~184~~632

* Based on change in net asset value per Unit.

The accompanying notes are an integral part of these financial statements.

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MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

For the ~~Six~~Nine Months Ended ~~June~~September 30, 2012 and 2011

(Unaudited)

	Units of
	Partnership	Limited	General
	Interest	Partners	Partner	Total
		$	$	$
Partners’ Capital,
December 31, 2011	948,944.872	13,888,123	180,161	14,068,284
Net Loss	–	(~~394~~251,~~006~~534)	(53,~~449~~530)	(~~399~~255,~~455~~064)
Redemptions	(76109,~~407~~093.~~466~~762)	(1,~~124~~606,~~499~~185)	–	(1,~~124~~606,~~499~~185)
Partners’ Capital,
June 30, 2012	872,537.406	12,369,618	174,712	12,544,330
September 30, 2012	839,851.110	12,030,404	176,631	12,207,035
Partners’ Capital,
December 31, 2010	1,135,405.366	19,232,434	208,073	19,440,507
Net Loss	–	(21,~~251~~971,~~577~~160)	(2521,~~027~~862)	(21,~~276~~993,~~604~~022)
Redemptions	(78133,~~308~~058.~~532~~254)	(12,~~241~~088,~~197~~449)	–	(12,~~241~~088,~~197~~449)
Partners’ Capital,
June 30, 2011	1,057,096.834	15,739,660	183,046	15,922,706
September 30, 2011	1,002,347.112	15,172,825	186,211	15,359,036

The accompanying notes are an integral part of these financial statements.

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MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

NOTES TO FINANCIAL STATEMENTS

~~June~~September 30, 2012

(Unaudited)

The unaudited financial statements contained herein include, in the opinion of management, all adjustments necessary for a fair presentation of the financial condition and results of operations of Morgan Stanley Smith Barney Spectrum Global Balanced L.P. (the “Partnership”). The financial statements and condensed notes herein should be read in conjunction with the Partnership’s Annual Report on Form 10-K for the fiscal year ending December 31, 2011 (the “Form 10-K”).

1. Organization

Morgan Stanley Smith Barney Spectrum Global Balanced L.P. is a Delaware limited partnership organized in 1994 to engage primarily in the speculative trading of futures contracts, options on futures and forward contracts, and forward contracts on physical commodities and other commodity interests, including, but not limited to, foreign currencies, financial instruments, metals, energy, and agricultural products (collectively, “Futures Interests”) (refer to Note 4, Financial Instruments). The Partnership is one of the Morgan Stanley ~~Smith Barney~~ Spectrum series of funds, comprised of the Partnership, Morgan Stanley Smith Barney Spectrum Currency and Commodity L.P., Morgan Stanley Smith Barney Spectrum Select L.P., Morgan Stanley Smith Barney Spectrum Strategic L.P., and Morgan Stanley Smith Barney Spectrum Technical L.P. (collectively, the “Spectrum Series”).

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MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

~~The~~Ceres ~~Partnership’s~~Managed ~~general~~Futures ~~partner~~LLC, isa ~~Ceres~~Delaware ~~Managed~~limited ~~Futures~~liability ~~LLC~~company, acts as a general partner (“Ceres” or the “General Partner”) and commodity pool operator of the Partnership. ~~The~~ ~~non~~Ceres is a wholly-~~clearing~~owned ~~commodity~~subsidiary ~~broker~~of Morgan Stanley Smith Barney Holdings LLC (“MSSBH”). MSSBH is majority-owned indirectly by Morgan Stanley and minority-owned indirectly by Citigroup Inc. As of September 26, 2012, Morgan Stanley Smith Barney LLC (“MSSB”) is doing business as Morgan Stanley Wealth Management. This entity, where the Partnership continues to maintain a cash account previously acted as a non-clearing commodity broker for the Partnership. The clearing commodity brokers are Morgan Stanley & Co. LLC (“MS&Co.”) and Morgan Stanley & Co. International plc (“MSIP”). MS&Co. also acts as the counterparty on all trading of foreign currency forward contracts. Morgan Stanley Capital Group Inc. (“MSCG”) acts as the counterparty on all trading of options on foreign currency forward contracts. MSIP serves as the commodity broker for trades on the London Metal Exchange (“LME”). ~~Ceres is a wholly-owned subsidiary of~~ Morgan Stanley ~~Smith~~Wealth ~~Barney~~Management ~~Holdings LLC (“MSSBH”). MSSBH~~ is ~~majority-owned~~a ~~indirectly by Morgan Stanley and minority-owned indirectly by Citigroup Inc. MSSB is the~~ principal subsidiary of MSSBH. MS&Co., MSIP, and MSCG are wholly-owned subsidiaries of Morgan Stanley. The trading advisors to the Partnership are SSARIS Advisors, LLC (“SSARIS”), Altis Partners (Jersey) Limited (“Altis”), and C-View International Limited (“C-View”) (each individually, a “Trading Advisor”, or collectively, the “Trading Advisors”).

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MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2.	Financial Highlights

Financial Highlights for the three and ~~six~~nine months ended ~~June~~September 30, 2012 and 2011 were as follows:

For the Three Months For the ~~Six~~Nine Months

~~Months~~ Ended ~~June~~September 30, ~~Months~~ Ended ~~June~~September 30,

	2012	2011	2012	2011
Per Unit operating performance:
Net asset value at the beginning of the period:	$ 14.7238	$ 15.8006	$ 14.83	$ 17.12
Interest Income	– (3)	– (3)	~~– (3)~~0.01	0.01
Expenses	(0.2223)	(0.24)	(0.4568)	(0.5073)
Realized/Unrealized Loss (1)	(0.12)	(0.50) (4)	– (3)	(1.57) (4)
Realized/Unrealized Income (Loss) (1)	0.38	0.50	0.37	(1.08)
Net Loss	(0.34)	(0.74)	(0.45)	(2.06)
Net Income(Loss)	0.15	0.26	(0.30)	(1.80)
Net asset value, June 30:	$ 14.38	$ 15.06	$ 14.38	$ 15.06
Net asset value, September 30:	$ 14.53	$ 15.32	$ 14.53	$ 15.32
Ratios to average net assets:
Net Investment Loss (2)	(6.20)%	(6.31)%	(6.21)%	(6.32)%
Expenses before Incentive Fees (2)	6.21%	6.31%	6.2%	6.3%
Expenses after Incentive Fees (2)	6.21%	6.31%	6.2%	6.3%
Net Loss (2)	(9.5)%	(19.2)%	(6.0)%	(26.5)%
Net Income (Loss) (2)	4.6%	7.2%	(2.6)%	(15.9)%
Total return before incentive fees	(21.3)0%	(41.7)%	(32.0)%	(1210.05)%
Total return after incentive fees	(21.3)0%	(41.7)%	(32.0)%	(1210.05)%

(1) Realized/Unrealized Income (Loss) is a balancing amount necessary to reconcile the change in net asset value per Unit with the other per Unit information.

(2)

Annualized (except for incentive fees if applicable).

(3) Amounts less than $0.005 per ~~Units~~Unit.

(4) These amounts have been reclassified from the prior year financial statements to conform to the current year presentation. Specifically, realized and unrealized income (loss) per Unit amounts were combined in the 2011 Financial Highlights presentation.

3. Related Party Transactions

The Partnership’s cash ~~may~~is be on deposit with ~~MSSB,~~ MS&Co., ~~and/or MSIP~~ in Futures Interests trading accounts to meet margin requirements as needed. ~~MSSB~~Monthly MS&Co. pays the Partnership atinterest ~~each~~income ~~month~~on ~~end~~100% ~~interest~~of the average

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MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

~~income~~daily onequity ~~100%~~maintained ofin ~~the~~cash ~~funds~~in onthe ~~deposit~~Partnership’s ~~with~~account ~~the~~during ~~commodity~~each ~~brokers~~month at a rate equal to 100% of the monthly average of the 4-week U.S. Treasury bill discount rate ~~during such month~~. ~~MSSB~~For ~~retains~~purposes ~~any~~of such interest ~~earned~~payments, indaily ~~excess~~funds ofdo ~~the~~not ~~interest~~include ~~paid~~monies bydue ~~MSSB~~ to the Partnership~~. For~~ ~~purposes~~on ofor ~~such~~with ~~interest~~respect ~~payments~~to futures, ~~net~~forwards, ~~assets~~or dooptions contracts that have not ~~include~~been ~~monies~~received. MS&Co. ~~owed~~retains toany interest earned in excess of the ~~Partnership~~interest onpaid ~~Futures~~to ~~Interests~~the Partnership. The Partnership pays brokerage fees to MS&Co.

4. Financial Instruments

The Partnership trades Futures Interests. Futures and forwards represent contracts for delayed delivery of an instrument at a specified date and price. Futures Interests are open commitments until settlement date, at which time they are realized. They are valued at fair value, generally on a daily basis, and the unrealized gains and losses on open contracts (the difference between contract trade price and market price) are reported in the Statements of Financial Condition as a net unrealized gain or loss on open contracts. The resulting net change in unrealized gains and losses is reflected in the “Net change in unrealized trading profit (loss)” for open contracts from one period to the next on the Statements of Income and Expenses. The fair value of exchange-traded futures, options and forward contracts is determined by the various futures exchanges, and reflects the settlement price for each contract as of the close of business on the last business day of the reporting period. The fair value of foreign currency forward contracts is extrapolated on a forward basis from the spot prices quoted as of approximately 3:00 P.M. (E.T.) of the last business day of the reporting period from various exchanges. The fair value of non-exchange-traded foreign currency option contracts is calculated by applying an industry standard model application for options valuation of foreign

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MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

currency options, using as input the spot prices, interest rates, and option implied volatilities quoted as of approximately 3:00 P.M. (E.T.) on the last business day of the reporting period. Risk arises from changes in the value of these contracts and the potential inability of counterparties to perform under the terms of the contracts. There are numerous factors which may significantly influence the fair value of these contracts, including interest rate volatility.

The Partnership may buy or write put and call options through listed exchanges and the over-the-counter market. The buyer of an option has the right to purchase (in the case of a call option) or sell (in the case of a put option) a specified quantity of a specific Futures Interest on the underlying assets at a specified price prior to or on a specified expiration date. The writer of an option is exposed to the risk of loss if the fair value of the Futures Interest on the underlying asset declines (in the case of a put option) or increases (in the case of a call option). The writer of an option can never profit by more than the premium paid by the buyer but can potentially lose an unlimited amount.

Premiums received/premiums paid from writing/purchasing options are recorded as liabilities/assets on the Statements of Financial Condition and are subsequently adjusted to fair values. The difference between the fair value of the option and the premiums received/premiums paid is treated as an unrealized gain or loss within the Statements of Income and Expenses. The fair value of exchange-traded contracts is based on the settlement price quoted by the exchange on the day with respect to which fair value is being determined. If an exchange-traded contract could not have been liquidated on such day due to the operation of daily limits or other rules of the exchange, the settlement price will be equal to the settlement price on the first subsequent day on which the contract could be liquidated.

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MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The Partnership’s contracts are accounted for on a trade-date basis and marked to market on a daily basis. The Partnership accounts for its derivative investments as described in Note 5, Derivatives and Hedging as required by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). A derivative is defined as a financial instrument or other contract that has all three of the following characteristics:

1)	a) One or more “underlyings” and b) one or more “notional amounts” or payment provisions or both;

2)	Requires no initial net investment or a smaller initial net investment than would be required for other types of contracts that would be expected to have a similar response relative to changes in market factors; and

3)	Terms that require or permit net settlement.

Generally, derivatives include futures, forwards, swaps or options contracts, and other financial instruments with similar characteristics such as caps, floors, and collars.

The net unrealized gains (losses) on open contracts, reported as a component of “Trading Equity” on the Statements of Financial Condition, and their longest contract maturities were as follows:

	Net Unrealized Gains/(Losses) on Open Contracts			Longest Maturities
Date	Exchange-Traded	Off-Exchange-Traded	Total	Exchange-Traded	Off-Exchange-Traded
	$	$	$
June 30, 2012	1,091,756	(35,319)	1,056,437	Jun. 2014	Jul. 2012
Sep. 30, 2012	960,037	26,067	986,104	Sep. 2014	Oct. 2012
Dec. 31, 2011	1,229,274	(8,497)	1,220,777	Dec. 2013	Jan. 2012

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MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

In general, the risks associated with off-exchange-traded contracts are greater than those associated with exchange-traded contracts because of the greater risk of default by the counterparty to an off-exchange-traded contract. The Partnership has credit risk associated with counterparty nonperformance. As of the date of the financial statements, the credit risk associated with the instruments in which the Partnership trades is limited to the unrealized gains (losses) amounts reflected in the Partnership’s Statements of Financial Condition. The net unrealized gains (losses) on open contracts is further disclosed gross by type of contract and corresponding fair value level in Note 6, Fair Value Measurements and Disclosures.

The Partnership also has credit risk because MS&Co., MSIP, and/or MSCG act as the futures commission merchants or the counterparties, with respect to most of the Partnership’s assets. Exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts are fair valued on a daily basis, with variations in value settled on a daily basis. MS&Co. and MSIP, each acting as a commodity futures broker for the Partnership’s exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts, are required, pursuant to regulations of the Commodity Futures Trading Commission (“CFTC”), to segregate from their own assets, and for the sole benefit of their commodity customers, total cash held by them with respect to exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts, including an amount equal to the net unrealized gains (losses) on all open exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts, which funds, in the aggregate, totaled $12,~~789~~456,~~645~~404 and $14,421,691 at ~~June~~September 30, 2012 and December 31, 2011, respectively. With respect to the Partnership’s off-exchange-traded forward currency contracts and forward currency options contracts, there are no daily settlements of variation in ~~value, nor is~~

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MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

value, nor is there any requirement that an amount equal to the net unrealized gains (losses) on such contracts be segregated. However, the Partnership is required to meet margin requirements equal to the net unrealized loss on open forward currency contracts in the Partnership accounts with the counterparty, which is accomplished by daily maintenance of the cash balance in a custody account held at ~~MSSB for the benefit of~~ MS&Co. With respect to those off-exchange-traded forward currency contracts, the Partnership is at risk to the ability of MS&Co., the sole counterparty on all such contracts, to perform. With respect to those off-exchange-traded forward currency options contracts, the Partnership is at risk to the ability of MSCG, the sole counterparty on all such contracts, to perform. The Partnership has a netting agreement with each counterparty. The primary terms are based on industry standard master agreements. These agreements, which seek to reduce both the Partnership’s and the counterparties’ exposure on off-exchange-traded forward currency contracts, including options on such contracts, should materially decrease the Partnership’s credit risk in the event of MS&Co.’s or MSCG’s bankruptcy or insolvency.

The General Partner monitors and attempts to control the Partnership’s risk exposure on a daily basis through financial, credit and risk management monitoring systems, and accordingly, believes that it has effective procedures for evaluating and limiting the credit and market risks to which the Partnership may be subject. These monitoring systems generally allow the General Partner to statistically analyze actual trading results with risk adjusted performance indicators and correlation statistics. In addition, online monitoring systems provide account analysis of futures, forwards and options positions by sector, margin requirements, gain and loss transactions and collateral positions.

- 14 -

MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The futures, forwards and options traded by the Partnership involve varying degrees of related market risk. Market risk is often dependent upon changes in the level or volatility of interest rates, exchange rates, and prices of financial instruments and commodities, factors that result in frequent changes in the fair value of the Partnership’s open positions, and consequently in its earnings, whether realized or unrealized, and cash flow. Gains and losses on open positions of exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts are settled daily through variation margin. Gains and losses on off-exchange-traded forward currency contracts are settled upon termination of the contract. Gains and losses on off-exchange-traded forward currency options contracts are settled on an agreed-upon settlement date.

5. Derivatives and Hedging

The Partnership’s objective is to profit from speculative trading in Futures Interests. Therefore, the Trading Advisors for the Partnership will take speculative positions in Futures Interests where they feel the best profit opportunities exist for their trading strategy. As such, the average number of contracts outstanding in absolute quantities (the total of the open long and open short positions) has been presented as a part of the volume disclosure, as position direction is not an indicative factor in such volume disclosures. With regard to foreign currency forward trades, each notional quantity amount has been converted to an equivalent contract based upon an industry convention.

- 15 -

MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The following tables summarize the valuation of the Partnership’s investments as of ~~June~~September 30, 2012 and December 31, 2011, respectively.

The Effect of Trading Activities on the Statements of Financial Condition as of ~~June~~September 30, 2012:

Futures and Forward Contracts	Long Unrealized Gain	Long Unrealized Loss	Short Unrealized Gain	Short Unrealized Loss	Net Unrealized Gain/(Loss)	Average number of contracts outstanding for the ~~six~~nine months (absolute quantity)
	$	$	$	$	$
Commodity	~~132~~93,~~779~~980	(59109,~~888~~835)	~~139~~17,~~980~~827	(~~169~~31,~~405~~434)	43(29,~~466~~462)	~~254~~221
Equity	614,~~974~~311	(122,~~343~~814)	111,~~945~~900	–(8,350)	62(14,~~576~~953)	4345
Foreign currency	4156,~~918~~321	(2144,~~560~~828)	3517,~~169~~047	(569,~~921~~650)	(118,~~394)~~890	~~1,008~~910
Interest rate	81120,~~094~~165	(181,~~103~~524)	~~366~~1,264	(413,~~598~~024)	58106,~~759~~881	~~331~~391
Total	~~317~~274,~~765~~777	(~~100~~179,~~894~~001)	~~177~~48,~~460~~038	(~~230~~62,~~924~~458)	~~163~~81,~~407~~356
Unrealized currency gain					~~893~~904,~~030~~748
Total net unrealized gain on open contracts					1986,~~056,437~~104

		Average number of contracts outstanding
		for the six months
		for the nine months
		(absolute quantity)
Option Contracts at Fair Value	$
Options purchased	~~7,801~~–	1
Options written	(349,~~809~~266)	15

- 16 -

MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The Effect of Trading Activities on the Statements of Financial Condition as of December 31, 2011:

Futures and Forward Contracts	Long Unrealized Gain	Long Unrealized Loss	Short Unrealized Gain	Short Unrealized Loss	Net Unrealized Gain	Average number of contracts outstanding for the year (absolute quantity)
	$	$	$	$	$

Commodity	26,687	(42,619)	281,332	(69,359)	196,041	233
Equity	10,832	(5,231)	3,176	(1,161)	7,616	39
Foreign currency	22,399	(18,270)	54,621	(21,149)	37,601	1,920
Interest rate	72,718	(4,626)	21,080	(4,515)	84,657	277
Total	132,636	(70,746)	360,209	(96,184)	325,915

Unrealized currency gain					894,862
Total net unrealized gain on open contracts					1,220,777

		Average number of
		contracts outstanding
		for the year
		(absolute quantity)
Option Contracts at Fair Value	$
Options purchased	814	1
Options written	–	1

The following tables summarize the net trading results of the Partnership for the three and ~~six~~nine months ended ~~June~~September 30, 2012 and 2011, respectively.

The Effect of Trading Activities on the Statements of Income and Expenses for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2012, included in Total Trading Results:

	For the Three Months	For the ~~Six~~Nine Months
	Ended June 30, 2012	Ended June 30, 2012
	Ended September 30, 2012	Ended September 30, 2012
Type of Instrument	$	$
Commodity	~~(77~~82,~~803)~~180	21103,~~751~~931
Equity	~~(159~~82,~~500)~~631	59142,~~502~~133
Foreign currency	~~(176~~103,~~205)~~831	(~~150~~46,~~605~~774)
Interest rate	~~310~~54,~~977~~390	79134,~~910~~300
Unrealized currency loss	(3,158)	(1,832)
Unrealized currency gain	11,718	9,886
Total	~~(105~~334,~~689)~~750	8343,~~726~~476

- 17 -

MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Line Items on the Statements of Income and Expenses for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2012:

	For the Three Months	For the ~~Six~~Nine Months
	Ended June 30, 2012	Ended June 30, 2012
	Ended September 30, 2012	Ended September 30, 2012
Trading Results	$	$
Net realized	~~(109~~383,~~564)~~271	~~189~~572,~~605~~876
Net change in unrealized	3(48,~~875~~521)	(~~180~~229,~~879~~400)
Total Trading Results	~~(105~~334,~~689)~~750	8343,~~726~~476

The Effect of Trading Activities on the Statements of Income and Expenses for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2011, included in Total Trading Results:

	For the Three Months	For the ~~Six~~Nine Months
	Ended June 30, 2011	Ended June 30, 2011
	Ended September 30, 2011	Ended September 30, 2011
Type of Instrument	$	$
Commodity	(~~516~~116,~~509~~970)	(~~665~~782,~~135~~105)
Equity	(~~479~~294,~~340~~906)	(~~683~~978,~~138~~044)
Foreign currency	~~208~~(132,~~886~~530)	(~~527~~659,~~067~~597)
Interest rate	~~287~~1,~~561~~089,024	~~170~~1,~~859~~259,883
Unrealized currency loss	(3420,~~540~~621)	(3354,~~561~~182)
Total	~~(533~~523,~~942)~~997	(1,~~738~~214,~~042~~045)

Line Items on the Statements of Income and Expenses for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2011:

	For the Three Months	For the ~~Six~~Nine Months
	Ended June 30, 2011	Ended June 30, 2011
	Ended September 30, 2011	Ended September 30, 2011
Trading Results	$	$
Net realized	~~(485~~274,~~948)~~656	(1949,~~223,860~~204)
Net change in unrealized	~~(47~~249,~~994)~~341	(~~514~~264,~~182~~841)
Total Trading Results	~~(533~~523,~~942)~~997	(1,~~738~~214,~~042~~045)

6. Fair Value Measurements and Disclosures

Effective January 1, 2012, the Partnership adopted Accounting Standards Update (“ASU”) 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in the accounting principles generally accepted in the United States of America (“U.S. GAAP”) and International Financial Reporting Standards (“IFRS”). The amendments within this ASU change the wording used to

- 18 -

MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements to eliminate unnecessary wording differences between U.S. GAAP and IFRS. However, some of the amendments clarify the FASB’s intent about the application of existing fair value measurement requirements and other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. This new guidance did not have a significant impact on the Partnership’s financial statements.

Financial instruments are carried at fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Assets and liabilities carried at fair value are classified and disclosed in the following three levels: Level 1 - unadjusted quoted market prices in active markets for identical assets and liabilities; Level 2 - inputs other than unadjusted quoted market prices that are observable for the asset or liability, either directly or indirectly (including unadjusted quoted market prices for similar investments, interest rates, credit risk); and Level 3 - unobservable inputs for the asset or liability (including the Partnership’s own assumptions used in determining the fair value of investments).

quoted market prices for similar investments, interest rates, credit risk); and Level 3 - unobservable inputs for the asset or liability (including the Partnership’s own assumptions used in determining the fair value of investments).

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Partnership’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.

- 19 -

MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The Partnership’s assets and liabilities measured at fair value on a recurring basis are summarized in the following tables by the type of inputs applicable to the fair value measurements.

June 30, 2012	Unadjusted Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
September 30, 2012	Unadjusted Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
	$	$	$	$
Assets
Futures	~~462~~267,~~797~~815	–	n/a	~~462~~267,~~797~~815
Forwards	–	3255,~~428~~000	n/a	3255,~~428~~000
Options Purchased	–	7,801	n/a	7,801
Total Assets	267,815	55,000	n/a	322,815
Total Assets	462,797	40,229	n/a	503,026
Liabilities
Futures	~~264~~212,~~071~~526	–	n/a	~~264~~212,~~071~~526
Forwards	–	6728,~~747~~933	n/a	6728,~~747~~933
Options Written	349,~~809~~266	–	n/a	349,~~809~~266
Total Liabilities	~~298~~221,~~880~~792	6728,~~747~~933	n/a	~~366~~250,~~627~~725
Unrealized currency gain				~~893~~904,~~030~~748
*Net fair value	163,917	(27,518)	n/a	1,029,429
* Net fair value	46,023	26,067	n/a	976,838

- 20 -

MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2011	Unadjusted Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
	$	$	$	$
Assets
Futures	472,189	–	n/a	472,189
Forwards	–	20,656	n/a	20,656
Options Purchased	–	814	n/a	814
Total Assets	472,189	21,470	n/a	493,659
Liabilities
Futures	137,777	–	n/a	137,777
Forwards	–	29,153	n/a	29,153
Total Liabilities	137,777	29,153	n/a	166,930
Unrealized currency gain				894,862
*Net fair value	334,412	(7,683)	n/a	1,221,591
* Net fair value	334,412	(7,683)	n/a	1,221,591

* This amount comprises the “Total net unrealized gain on open contracts” and “Options purchased” and “Options written” on the Statements of Financial Condition.

During the period January 1, 2012 to ~~June~~September 30, 2012, there were no Level 3 assets and liabilities and there were no transfers of assets or liabilities between Level 1 and Level 2.

7. Other Pronouncements

In December 2011, the FASB issued ASU 2011-11, “Disclosures about Offsetting Assets and Liabilities”, which creates a new disclosure requirement about the nature of an entity’s rights of setoff and the related arrangements associated with its financial instruments and derivative instruments. Entities are required to disclose both gross information and net information about both instruments and

- 21 -

MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Partnership should also provide the disclosures retrospectively for all comparative periods presented. The Partnership is currently evaluating the impact that the pronouncement would have on the financial statements.

In October 2011, the FASB issued a proposed ASU intended to improve and converge financial reporting by setting forth consistent criteria for determining whether an entity is an investment company. Under longstanding U.S. GAAP, investment companies carry all of their investments at fair value, even if they hold a controlling interest in another company. The primary changes being proposed by the FASB relate to which entities would be considered investment companies as well as certain disclosure and presentation requirements. In addition to the changes to the criteria for determining whether an entity is an investment company, the FASB also proposes that an investment company would be required to consolidate another investment company if it holds a controlling financial interest in the entity. In August 2012, the FASB updated the proposed ASU to state that entities regulated under the Investment Company Act of 1940 should qualify to be investment companies within the proposed investment company guidance. The Partnership will evaluate the impact that this proposed update would have on the financial statements once the pronouncement is issued.

- 22 -

MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

8. Restricted and Unrestricted Cash

As reflected on the Partnership’s Statements of Financial Condition, restricted cash equals the cash portion of assets on deposit to meet margin requirements plus the cash required to offset unrealized losses on foreign currency forwards and options contracts and offset unrealized losses on offset LME positions. All of these amounts are maintained separately. Cash that is not classified as restricted cash is therefore classified as unrestricted cash.

9. Income Taxes

No provision for income taxes has been made in the accompanying financial statements, as partners are individually responsible for reporting income or loss based upon their respective share of the Partnership’s revenues or expenses for income tax purposes. The Partnership files U.S. federal and state tax returns.

The guidance issued by the FASB on income taxes clarifies the accounting for uncertainty in income taxes recognized in the Partnership's financial statements, and prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken. The Partnership has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements as of ~~June~~September 30, 2012 and December 31, 2011. If applicable, the Partnership recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in other expenses in the Statements of Income and Expenses. Generally, ~~the 2008~~

- 23 -

MORGAN STANLEY SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.

NOTES TO FINANCIAL STATEMENTS (CONCLUDED)

the 2009 through 2011 tax years remain subject to examination by U.S. federal and most state tax authorities. No income tax returns are currently under examination.

10. Subsequent Events

Management of Ceres performed its evaluation of subsequent events through the date of filing, and has determined that there were no subsequent events requiring adjustment of or disclosure in the financial statements.

- 24 -

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

As of ~~June~~September 30, 2012, the percentage of assets allocated to each market sector was approximately as follows: Interest Rate 2219.5624%; Currency 2748.1582%; Equity 1211.3578%; and Commodity 3720.9416%.

Liquidity. The Partnership deposits its assets with ~~MSSB as non-clearing commodity broker and~~ MS&Co. and MSIP as clearing commodity brokers in separate futures, forward and options trading accounts established for each Trading Advisor. Such assets are used as margin to engage in trading and may be used as margin solely for the Partnership’s trading. The assets are held in either non-interest bearing bank accounts or in securities and instruments permitted by the CFTC for investment of customer segregated or secured funds. Since the Partnership’s sole purpose is to trade in futures, forwards and options, it is expected that the Partnership will continue to own such liquid assets for margin purposes.

The Partnership’s investment in futures, forwards and options may, from time to time, be illiquid. Most U.S. futures exchanges limit fluctuations in prices during a single day by regulations referred to as “daily price fluctuation limits” or “daily limits.” Trades may not be executed at prices beyond the daily limit. If the price for a particular futures or options contract has increased or decreased by an amount equal to the daily limit, positions in that futures or options contract can neither be taken nor liquidated unless traders are willing to effect trades at or within the limit. Futures prices have occasionally moved the daily limit for several consecutive days with little or no trading. These market conditions could prevent the Partnership from promptly liquidating its futures or options contracts and result in restrictions on redemptions.

- 25 -

There is no limitation on daily price moves in trading forward contracts on foreign currencies. The markets for some world currencies have low trading volume and are illiquid, which may prevent the Partnership from trading in potentially profitable markets or prevent the Partnership from promptly liquidating unfavorable positions in such markets, subjecting it to substantial losses. Either of these market conditions could result in restrictions on redemptions. For the periods covered by this report, illiquidity has not materially affected the Partnership’s assets.

There are no known material trends, demands, commitments, events, or uncertainties at the present time that are reasonably likely to result in the Partnership’s liquidity increasing or decreasing in any material way.

As of ~~June~~September 30, 2012, approximately 8161.6874% of the Partnership’s total investments are futures contracts which are exchange-traded while approximately 1838.3226% are forward contracts which are off-exchange traded.

Capital Resources. The Partnership does not have, nor does it expect to have, any capital assets. Redemptions of units of limited partnership interest (“Unit(s)”) in the future will affect the amount of funds available for investments in futures, forwards and options in subsequent periods. It is not possible to estimate the amount, and therefore the impact, of future outflows of Units.

There are no known material trends, favorable or unfavorable, that would affect, nor any expected material changes to, the Partnership’s capital resource arrangements at the present time.

- 26 -

Off-Balance Sheet Arrangements and Contractual Obligations. The Partnership does not have any off-balance sheet arrangements, nor does it have contractual obligations or commercial commitments to make future payments that would affect its liquidity or capital resources.

Results of Operations

General. The Partnership’s results depend on the Trading Advisors and the ability of each Trading Advisor’s trading program to take advantage of price movements in the futures, forward and options markets.

SSARIS trades its Global Multi-Strategy Program on behalf of the Partnership. SSARIS’ Global Multi-Strategy program allocates to global hedged equity, global hedged fixed income, and long/short global assets. It is diversified by both style (divergent and convergent strategies) and asset class (global stocks, bonds, currencies and real assets). The hedged equity component may be composed of positions in FTSE 100, DAX 30, Nikkei 225, All Ordinaries, CAC 40, Hang Seng and S&P 500 futures indices. The hedged fixed income exposure may include British, German, Japanese, Australian and fixed income futures. Real asset exposure is diversified across energy, precious metal, base metal, financial and agricultural markets. The investment program uses a multi-determinant model to rebalance the independent strategies. The global stock and bond exposure is managed using models which interpret macroeconomic, relative value, inflation, interest rate, and price-related data. Exposure within the long/ short global asset sector is regulated by combining individual market expected return analysis with a system that asset weights each market according to relative volatility and correlation.

- 27 -

Altis trades its Global Futures Portfolio Program on behalf of the Partnership. It is a systematic, automated trading program that builds on the market experience of Altis’ principals and employs a unique proprietary Advanced Asset Allocator. The Advanced Asset Allocator was specifically developed to manage portfolios of derivative instruments in a robust and scalable manner. The portfolio management technology combines original, traditional and contrasting investment techniques into one complete and comprehensive trading system. Investment changes are implemented after considering their effect on the whole portfolio not just the individual markets concerned.

C-View trades its C-View Limited Managed Account 3X Program at 2x leverage. C-View’s program trades spot and forward foreign exchange in the interbank market, non-deliverable forwards and OTC currency options. C-View’s approach is discretionary, based on a combination of fundamental analysis, technical analysis and market psychology. The intention is to capture profits from short to medium-term price trends while maintaining profitability in ranging markets.

The following table sets forth the percentage and the amount of the Partnership’s net assets allocated to each Trading Advisor for the periods ending ~~June~~September 30, 2012 and ~~March~~June 3130, 2012, respectively, and the change during the applicable period.

Trading Advisor	Allocations as of ~~June~~September 30, 2012 (%)	Allocations as of ~~March~~June 3130, 2012 (%)	Allocations as of ~~June~~September 30, 2012($)	Allocations as of ~~March~~June 3130, 2012 ($)	Change during the period
SSARIS	3032.4392	3130.7743	34,~~817~~018,~~574~~358	43,~~247~~817,~~567~~574	~~-10~~5.1226%
Altis	3835.5143	3738.3751	4,~~831~~324,~~061~~511	4,~~997~~831,~~050~~061	-310.3249%
C-View	31.0665	3031.8606	3,~~895~~864,~~695~~166	43,~~125~~895,~~800~~695	-50.5881%

- 28 -

The following presents a summary of the Partnership’s operations for the three and ~~six~~nine months ended ~~June~~September 30, 2012 and 2011, and a general discussion of its trading activities during each period. It is important to note, however, that the Trading Advisors trade in various markets at different times and that prior activity in a particular market does not mean that such market will be actively traded by the Trading Advisors or will be profitable in the future. Consequently, the results of operations of the Partnership are difficult to discuss other than in the context of the Trading Advisors’ trading activities on behalf of the Partnership during the period in question. Past performance is no guarantee of future results.

The Partnership’s results of operations set forth in the financial statements on pages 2 through 24 of this report are prepared in accordance with U.S. GAAP, which require the use of certain accounting policies that affect the amounts reported in these financial statements, including the following: the contracts the Partnership trades are accounted for on a trade-date basis and marked to market on a daily basis. The difference between their original contract value and market value is recorded on the Statements of Income and Expenses as “Net change in unrealized” trading profit (loss) for open unrealized contracts, and recorded as “Net realized” trading profit (loss) when open positions are closed out. The sum of these amounts constitutes the Partnership’s trading results. The market value of a futures contract is the settlement price on the exchange on which that futures contract is traded on a particular day. The value of a foreign currency forward contract is based on the spot rate as of approximately 3:00 P.M. (E.T.), the close of the business day. Interest income, as well as management fees, incentive fees, and brokerage fees of the Partnership are recorded on an accrual basis.

- 29 -

Ceres believes that, based on the nature of the operations of the Partnership, no assumptions relating to the application of critical accounting policies other than those presently used could reasonably affect reported amounts.

For the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2012

The Partnership recorded total trading results including interest income totaling $~~(103~~337,~~568)~~586 and expenses totaling $~~199~~193,~~637~~195 resulting in a net ~~loss~~income of $~~303~~144,~~205~~391 for the three months ended ~~June~~September 30, 2012. The Partnership’s net asset value per Unit ~~decreased~~increased from $14.7238 at ~~March~~June 3130, 2012, to $14.3853 at ~~June~~September 30, 2012.

The most significant trading ~~losses~~gains were ~~incurred~~achieved within the ~~global~~currency ~~stock index~~ sector, primarily during ~~May~~July, from ~~long~~short positions in ~~U.S.,~~the ~~European,~~euro ~~and~~as ~~Pacific~~the ~~Rim~~value ~~equity~~of ~~index~~the ~~futures~~euro ~~as prices~~ declined ~~amid~~versus ~~an unexpected rise in~~ the U.S. ~~unemployment~~dollar ~~rate~~after ~~and~~European ~~weakening~~Central ~~economic~~Bank ~~data~~President ~~from~~Mario ~~China~~Draghi ~~and~~said ~~Europe. Within~~ the currency ~~sector,~~bloc ~~losses~~still ~~were~~faces ~~incurred~~risks ~~primarily~~after ~~during~~policy ~~April~~makers ~~from~~cut ~~short~~interest ~~positions~~rates into ~~the~~a ~~Japanese~~record ~~yen~~low. ~~versus~~Within the ~~U.S.~~global ~~dollar~~stock asindex ~~the~~sector, ~~value~~gains ofwere ~~the~~achieved ~~yen~~throughout ~~advanced after~~ the ~~Bank~~quarter offrom ~~Japan~~long ~~refrained~~positions ~~from~~in ~~easing~~U.S. ~~monetary~~equity ~~policy~~index ~~and~~futures ~~Spanish~~as ~~bond~~prices ~~yields~~moved ~~climbed,~~higher ~~reviving~~on ~~concern~~better-than-expected ~~Europe’s~~reports ~~debt~~of ~~crisis~~corporate ~~may~~earnings ~~spread~~ and ~~boosting~~U.S. ~~demand~~consumer ~~for the Japanese yen as a “safe-haven” currency~~sentiment. Within the ~~energy~~agricultural markets, ~~losses~~gains were ~~incurred~~achieved ~~throughout~~primarily aduring ~~majority~~July ~~of the quarter. During April, losses were incurred~~ from long positions in ~~gasoline~~soybean and corn futures as prices ~~declined~~rose onas ~~signs~~a ~~that~~heat ~~manufacturing~~wave isand ~~slowing~~drought in ~~China~~the ~~and~~U.S. ~~Europe,~~Midwest ~~raising~~threatened ~~concern~~to ~~the~~limit ~~global~~output. ~~recovery~~Within isthe ~~stalling~~global ~~and~~interest ~~fuel~~rate ~~demand~~sector, ~~may~~gains ~~decline.~~were ~~During~~achieved ~~June,~~primarily ~~losses~~during ~~were~~July ~~incurred~~ from ~~short~~long positions in ~~natural~~European ~~gas~~and U.S. fixed income futures as prices advanced toas ~~the~~a ~~highest~~euro-area ~~level~~report ~~since~~showing ~~January~~inflation onheld ~~forecasts~~at ofthe ~~above-normal~~slowest ~~temperatures~~since ~~across~~February 2011 added to signs the region is headed for a recession. Prices of European and U.S. ~~Prices~~fixed income futures continued to ~~rise~~move higher later in July after aGermany’s ~~U.S.~~top ~~government~~court ~~report~~said ~~revealed~~it awill ~~smaller-than-expected~~take ~~gain~~more inthan ~~inventories.~~eight Aweeks ~~portion~~to ofrule on the ~~Partnership’s~~euro-

- 30 -

~~losses~~area’s ~~during~~bailout ~~the~~fund, ~~quarter~~holding ~~was~~up ~~offset~~crisis byresolution ~~gains~~efforts ~~achieved~~and ~~within~~boosting demand for the ~~global~~relative ~~interest~~“safety” ~~rate~~of ~~markets~~government ~~during~~debt. ~~April~~Within ~~and~~the ~~May~~energy ~~from~~sector, ~~long~~gains ~~positions~~were inachieved ~~European,~~primarily ~~Australian,~~during ~~and~~August ~~U.S.~~from ~~fixed-income~~long futures aspositions ~~prices~~in ~~advanced~~RBOB (unleaded) gasoline as ~~Greece~~prices ~~failed~~advanced toearly ~~form~~in athe ~~unified~~month ~~government,~~on ~~increasing~~speculation ~~concern~~of ~~Europe’s~~increased ~~debt~~energy ~~crisis~~demand. isA ~~worsening~~portion ~~and~~of ~~spurring~~the ~~demand~~Partnership’s ~~for~~gains during the ~~relative~~quarter ~~“safety”~~was ofoffset ~~government~~by ~~debt.~~losses ~~Within~~incurred within the metals ~~markets~~sector, ~~gains were achieved~~ primarily during ~~May~~August, from short positions in ~~aluminum~~platinum ~~and nickel~~ futures as prices ~~declined~~rose asamid aconcern ~~reduction~~continued oflabor-related ~~Spain’s~~violence ~~credit~~at ~~rating~~mines ~~fueled~~in ~~concern~~South ~~that~~Africa ~~Europe’s debt crisis~~ will ~~slow~~curb ~~the economy and reduce demand for metals~~supplies.

The Partnership recorded total trading results including interest income totaling $12350,~~689~~275 and expenses totaling $~~412~~605,~~144~~339 resulting in a net loss of $~~399~~255,~~455~~064 for the ~~six~~nine months ended ~~June~~September 30, 2012. The Partnership’s net asset value per Unit decreased from $14.83 at December 31, 2011, to $14.3853 at ~~June~~September 30, 2012.

The most significant trading losses were incurred within the metals ~~markets~~sector, primarily during January, from short positions in platinum and tin as prices advanced on speculation metals demand will be supported by economic expansion in the U.S. and an easing credit policy in China. The Partnership’s losses ~~during~~for the first ~~half~~nine months of the year were offset by gains achieved within the ~~energy~~global stock index sector, primarily during ~~February~~the first quarter, from long ~~futures~~ positions in ~~RBOB~~U.S., ~~(unleaded)~~European, ~~gasoline~~ and ~~Brent~~Japanese ~~crude~~equity ~~oil~~index futures as prices ~~increased~~were onbuoyed ~~concerns~~by ~~over~~better-than-expected ~~inventory~~economic ~~levels~~reports ~~and~~in ~~rising~~these ~~tensions~~regions. inPrices ~~the~~also ~~Middle~~rose ~~East.~~after ~~Additionally,~~China ~~gains~~cut ~~were~~banks’ ~~achieved~~reserve ~~from~~requirements ~~short~~to ~~natural~~fuel ~~gas~~lending ~~futures~~and ~~positions~~the asU.S. ~~prices~~Federal ~~declined~~Reserve ~~throughout~~Board ~~the~~raised ~~majority~~its assessment of the ~~first~~U.S. ~~quarter~~economy. Within the ~~global~~currency ~~interest rate~~ sector, gains were achieved primarily during ~~April~~July ~~and May~~ from ~~long~~short positions in ~~European,~~the ~~Australian,~~euro ~~and~~as the value of the euro declined versus the U.S. ~~fixed-income~~dollar ~~futures~~after asEuropean ~~prices~~Central ~~advanced~~Bank asPresident ~~Greece~~Mario ~~failed~~Draghi tosaid ~~form~~the acurrency ~~unified~~bloc ~~government,~~still ~~increasing~~faces ~~concern~~risks ~~Europe’s~~after ~~debt~~policy ~~crisis~~makers iscut ~~worsening~~interest ~~and~~rates ~~spurring~~to a

- 31 -

record low. Within the global interest rate sector, gains were achieved primarily during April and May from long positions in European, Australian, and U.S. fixed-income futures as prices advanced as Greece failed to form a unified government, increasing concern Europe’s debt crisis is worsening and spurring demand for the relative “safety” of government debt. ~~Within~~Additional ~~the~~gains ~~global~~were ~~stock~~achieved ~~index~~within July from long positions in European and U.S. fixed income futures as prices resumed their climb higher. Within the energy sector, gains were achieved primarily during the first quarter, from long futures positions in ~~U.S.,~~RBOB ~~European,~~(unleaded) gasoline and ~~Japanese~~Brent ~~equity~~crude ~~index~~oil ~~futures~~ as prices ~~were~~increased ~~buoyed~~on byconcerns ~~better-than-expected~~over ~~economic~~inventory ~~reports~~levels inand ~~these~~rising ~~regions.~~tensions ~~Prices~~in ~~also~~the ~~rose~~Middle ~~after~~East. ~~China~~Additionally, ~~cut~~gains ~~banks’~~were ~~reserve~~achieved ~~requirements~~from toshort ~~fuel~~natural ~~lending~~gas ~~and~~futures ~~the~~positions ~~U.S.~~as ~~Federal~~prices ~~Reserve~~declined ~~Board~~throughout ~~raised~~the ~~its~~majority ~~assessment~~ of the ~~U.S.~~first ~~economy~~quarter. Within the agricultural sector, gains were achieved primarily during ~~April~~July from long positions in soybean and corn futures as prices ~~advanced~~rose onas ~~mounting concern that~~ a ~~freeze~~heat inwave ~~South America~~ and ~~rain~~drought in ~~Europe~~the ~~will~~U.S. ~~curb~~Midwest ~~oilseed~~threatened ~~supplies~~to limit output.

For the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2011

The Partnership recorded total trading results including interest income totaling $~~(532~~524,~~962)~~689 and expenses totaling $~~258~~241,~~949,~~107 resulting in a net ~~loss~~income of $~~791~~283,~~911~~582 for the three months ended ~~June~~September 30, 2011. The Partnership’s net asset value per Unit ~~decreased~~increased from $15.8006 at ~~March~~June 3130, 2011, to $15.0632 at ~~June~~September 30, 2011.

The most significant trading ~~losses~~gains were ~~incurred~~achieved inwithin the global ~~stock~~interest ~~index~~rate ~~markets,~~sector ~~primarily during June,~~ from long positions in European and U.S. ~~equity~~fixed ~~index~~income futures as prices ~~moved~~advanced ~~lower~~higher onthroughout ~~concerns about~~ the ~~overall~~majority ~~pace~~ of the ~~global~~quarter ~~economic~~due ~~recovery. Within the agricultural markets, losses were experienced primarily during April from long positions in cotton futures as prices declined~~ to ~~a three-month low on~~ concern ~~that~~about ~~demand may slow from China,~~ the ~~world’s~~European ~~biggest~~sovereign ~~buyer~~debt ofcrisis ~~the~~and ~~fiber.~~a ~~Within~~faltering ~~the~~global ~~energy markets, losses were experienced from short positions in natural gas futures as prices rose on forecasts of above-average temperatures in the U~~economy.~~S.,~~ ~~boosting demand for the fuel.~~ Within the metals markets, losses were experienced from long positions in base metals, primarily aluminum and lead, as prices fell after China restricted bank lending, spurring speculation anti-inflation policies may slow growth in the world’s

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~~second-biggest~~the ~~economy~~metals markets, gains were experienced primarily during September from short futures positions in copper, nickel, and ~~biggest~~zinc ~~purchaser~~futures as prices fell after continued fears of ~~base~~a “double dip” recession in the U.S. and Europe, along with inflationary pressures in China, spurred speculation global demand for metals may weaken. A portion of the Partnership’s ~~losses~~gains for the quarter was offset by ~~gains~~losses ~~achieved~~incurred within the ~~currency~~global ~~markets,~~stock ~~primarily~~index ~~during~~sector ~~April,~~due ~~from~~to long positions in U.S. and European equity index futures as prices dropped amid Standard & Poor’s downgrade of the ~~Japanese~~United ~~yen~~States’ sovereign credit rating, ~~Indian~~worse-than-expected ~~rupee~~economic reports, and ~~Swiss~~concern ~~franc~~about ~~and~~the ~~Taiwan~~European ~~dollar~~sovereign ~~versus~~debt crisis. Within the ~~U.S.~~agricultural ~~dollar~~complex, losses were incurred primarily during August and September due to long futures positions in corn and soybeans as prices declined on speculation that Europe’s sovereign debt crisis may hinder the ~~value~~global ofeconomy ~~these~~thus ~~currencies~~reducing ~~rose~~demand ~~against~~for the grains. Additionally, prices of corn futures continued to decline after a U.S. ~~dollar~~government ~~after~~report ~~better~~revealed bigger-than-expected ~~corporate~~U.S. ~~earnings~~inventories. ~~reports~~Within ~~and~~the ~~signs~~currency ofsector, ~~global~~losses ~~growth~~were ~~spurred~~incurred ~~demand~~primarily ~~for~~during ~~higher-yielding~~September ~~currencies.~~due ~~Additional~~to ~~currency~~long ~~gains~~positions ~~were~~in ~~recorded~~the ~~from~~New Zealand dollar versus the U.S. dollar, short positions in the ~~euro~~British pound versus the Australian dollar, and ~~British~~long ~~pound~~positions in the Australian dollar versus the ~~Swiss~~Canadian ~~franc~~dollar as the ~~franc’s~~ value ~~rose~~of the New Zealand dollar and Australian dollar moved lower in ~~response~~tandem towith ~~safe-haven~~declining ~~buying~~commodity prices. During August, short positions in ~~light~~the ofBritish pound and euro versus the ~~Greek~~Australian ~~debt~~dollar ~~crisis~~resulted in additional losses. Within the ~~global~~energy ~~interest rate markets~~sector, ~~gains~~losses were ~~achieved~~incurred primarily during ~~May~~August ~~from~~due to long futures positions in ~~U.S.~~crude ~~fixed-income~~oil ~~futures~~and its related products at the beginning of the month as prices ~~increased~~fell ~~following~~on ~~reports~~concern ~~that~~energy ~~showed~~demand ~~the~~may ~~U.S.~~falter ~~economy~~amid ~~grew~~slowing ~~less~~economic ~~than~~growth ~~forecast~~in ~~and~~the U.S. ~~jobless~~and ~~claims~~a ~~unexpectedly~~deepening ~~rose~~debt crisis in Europe.

The Partnership recorded total trading results including interest income totaling $(1,~~731~~206,~~660~~971) and expenses totaling $~~544~~786,~~944~~051, resulting in a net loss of $21,~~276~~993,~~604~~022 for the ~~six~~nine months ended ~~June~~September 30, 2011. The ~~Partnership’s net asset value per Unit decreased from $17.12 at December 31, 2010, to $15.06 at June 30, 2011.~~

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turmoil in the front contract that had hampered exports would possibly be easing. Losses were incurred in the metals complex, primarily during March, due to long positions in nickel, copper, and zinc futures as prices moved lower amid concern that rising energy costs associated with mounting unrest in the Middle East would potentially slow the global economy. Within the currency markets, losses were experienced primarily in January from short positions in the British pound and euro versus the Japanese yen as the value of the British pound and euro moved higher against the yen on speculation European officials would take additional measures to counter the sovereign debt crisis, while the S&P reduced JapanPartnership’s ~~credit~~net ~~rating~~asset ~~over~~value ~~elevated~~per ~~fiscal~~Unit ~~deficits.~~decreased ~~Within the energy markets, losses were experienced primarily during May~~ from ~~long~~$17.12 ~~futures positions in refined oil products as prices moved lower~~ on ~~speculation~~December ~~that~~31, a2010 ~~weakening global economy and the European debt crisis may lead~~ to ~~reduced energy demand~~$15.32 Aat ~~portion~~September ~~of the Partnership’s losses during the first half of the year was offset by gains achieved within the global interest rate sector~~30, ~~primarily during May, from long positions in U~~2011.~~S. fixed-income futures as prices increased following reports that showed the U.S. economy grew less than forecast and U.S. jobless claims unexpectedly rose.~~

The most significant trading losses were incurred within the global stock index markets, primarily during June, from long positions in European and U.S. equity index futures as prices moved lower on concern about the overall pace of the global economic recovery. Within the agricultural markets, losses were experienced primarily during March from long positions in corn futures as prices fell after a U.S. Department of Agriculture report revealed increasing world stockpiles and declining U.S. exports of the crop. Further losses were recorded in long cocoa futures positions as prices dropped on signs that the political turmoil in the Ivory Coast that had hampered exports would possibly be easing. Within the currency markets, losses were experienced primarily in January from short positions in the British pound and euro versus the Japanese yen as the value of the British pound and euro moved higher against the yen on speculation European officials would take additional measures to counter the sovereign debt crisis, while the S&P reduced Japan’s credit rating over elevated fiscal deficits. Within the energy markets, losses were experienced primarily during May from long futures positions in refined oil products as prices moved lower on speculation that a weakening global economy and the European debt crisis may lead to reduced energy demand. Losses were also incurred in the metals complex, primarily during March, due to long positions in nickel, copper, and zinc futures as prices moved lower amid concern that rising energy costs associated with mounting unrest in the Middle East would potentially slow the global economy and demand for industrial products. A portion of the Partnership’s losses during the first nine months of the year was offset by gains recorded in the global interest rate sector from long positions in European and U.S. fixed income futures as prices rose throughout the third quarter on increased demand for the relative “safety” of government bonds due to concern about a faltering global economic recovery.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Introduction

The Partnership is a commodity pool engaged primarily in the speculative trading of futures, forwards and options. The market-sensitive instruments held by the Partnership are acquired for speculative trading purposes only and, as a result, all or substantially all of the Partnership’s assets are at risk of trading loss. Unlike an operating company, the risk of market-sensitive instruments is inherent to the primary business activity of the Partnership.

The futures, forwards and options on such contracts traded by the Partnership involve varying degrees of related market risk. Market risk is often dependent upon changes in the level or volatility of interest rates, exchange rates, and prices of financial instruments and commodities, factors that result in frequent changes in the fair value of the Partnership’s open positions, and consequently in its earnings, whether realized or unrealized, and cash flow. Gains and losses on open positions of exchange-traded 34futures, exchange-traded forward, and exchange-traded futures-styled options contracts are settled daily through variation margin. Gains and losses on off-exchange-traded forward currency contracts and forward currency options contracts are settled upon termination of the contract. Gains and losses on off-exchange-traded forward currency options contracts are settled upon an agreed upon settlement date.

The futures, forwards and options on such contracts traded by the Partnership involve varying degrees of related market risk. Market risk is often dependent upon changes in the level or volatility of interest rates, exchange rates, and prices of financial instruments and commodities, factors that result in frequent changes in the fair value of the Partnership’s open positions, and consequently in its earnings, whether realized or unrealized, and cash flow. Gains and losses on open positions of exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts are settled daily through variation margin. Gains and losses on off-exchange-traded forward currency contracts and forward currency options contracts are settled upon termination of the contract. Gains and losses on off-exchange-traded forward currency options contracts are settled upon an agreed upon settlement date. However, the Partnership is required to meet margin requirements equal to the net unrealized loss on open forward currency contracts in the Partnership accounts with the counterparty, which is accomplished by daily maintenance of the cash balance in a custody account held at MSSB for the benefit of MS&Co.

The Partnership’s total market risk may increase or decrease as it is influenced by a wide variety of factors, including, but not limited to, the diversification among the Partnership’s open positions, the volatility present within the markets, and the liquidity of the markets.

The face value of the market sector instruments held by the Partnership is typically many times the applicable margin requirements. Margin requirements generally range between 2% and 15% of contract face value. Additionally, the use of leverage causes the face value of the market sector instruments held by the Partnership typically to be many times the total capitalization of the Partnership.

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The Partnership’s past performance is no guarantee of its future results. Any attempt to numerically quantify the Partnership’s market risk is limited by the uncertainty of its speculative trading. The Partnership’s speculative trading and use of leverage may cause future losses and volatility (i.e., “risk of ruin”) that far exceed the Partnership’s experience to date as discussed under the “Partnership’s Value at Risk in Different Market Sectors” section and significantly exceed the Value at Risk (“VaR”) tables disclosed.

Limited partners will not be liable for losses exceeding the current net asset value of their investment.

Quantifying the Partnership’s Trading Value at Risk

The following quantitative disclosures regarding the Partnership’s market risk exposures contain “forward-looking statements” within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). All quantitative disclosures in this section are deemed to be forward-looking statements for purposes of the safe harbor, except for statements of historical fact.

The Partnership accounts for open positions on the basis of fair value accounting principles. Any loss in the market value of the Partnership’s open positions is directly reflected in the Partnership’s earnings and cash flow.

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The Partnership’s risk exposure in the market sectors traded by the Trading Advisors is estimated below in terms of VaR. Please note that the VaR model is used to numerically quantify market risk for historic reporting purposes only and is not utilized by either Ceres or the Trading Advisors in their daily risk management activities.

VaR is a measure of the maximum amount which the Partnership could reasonably be expected to lose in a given market sector. However, the inherent uncertainty of the Partnership’s speculative trading and the recurrence in the markets traded by the Partnership of market movements far exceeding expectations could result in actual trading or non-trading losses far beyond the indicated VaR of the Partnership’s experience to date (i.e., “risk of ruin”). In light of the foregoing as well as the risks and uncertainties intrinsic to all future projections, the inclusion of the quantification in this section should not be considered to constitute any assurance or representation that the Partnership’s losses in any market sector will be limited to VaR or by the Partnership’s attempts to manage its market risk.

Exchange maintenance margin requirements have been used by the Partnership as the measure of its VaR. Maintenance margin requirements are set by exchanges to equal or exceed the maximum losses reasonably expected to be incurred in the fair value of any given contract in 95% - 99% of any one-day interval. Maintenance margin has been used rather than the more generally available initial margin, because initial margin includes a credit risk component, which is not relevant to VaR.

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The Partnership’s Value at Risk in Different Market Sectors

The following tables indicate the trading VaR associated with the Partnership’s open positions by market category as of ~~June~~September 30, 2012 and December 31, 2011, and the highest, lowest and average values during the three months ended ~~June~~September 30, 2012 and for the twelve months ended December 31, 2011. All open position trading risk exposures of the Partnership have been included in calculating the figures set forth below. There has been no material change in the trading VaR information previously disclosed in the Form 10-K.

As of ~~June~~September 30, 2012, the Partnership’s total capitalization was approximately $1312 million.

~~June~~ September 30, 2012

Primary Market		% of Total
Risk Category	VaR	Capitalization
Currency	$~~350~~694,~~467~~844	25.7969%
Interest Rate	~~291~~273,~~143~~877	2.3224%
Equity	~~159~~167,~~376~~661	1.2737%
Commodity	~~489~~287,~~637~~020	32.9035%
Total	$1,~~290~~423,~~623~~402	1011.2865%

Three Months Ended ~~June~~September 30, 2012

Market Sector	High VaR $	Low VaR $	Average VaR* $
Currency	1798,~~052,602~~694	~~350~~349,~~467~~709	~~665~~527,~~584~~695
Interest Rate	~~325~~386,~~997~~693	~~178~~226,~~106~~819	~~275~~317,~~886~~240
Equity	~~213~~245,~~738~~817	~~104~~127,~~401~~777	~~167~~183,~~764~~450
Commodity	~~506~~455,~~740~~627	~~301~~287,~~578~~020	~~426~~394,~~485~~961

* Average of month-end VaR.

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AtAs of December 31, 2011, the Partnership’s total capitalization was approximately $14 million.

December 31, 2011

Primary Market		% of
Risk Category	VaR	Total Capitalization

Currency	$522,600	3.71%

Interest Rate	236,878	1.68%

Equity	114,767	0.82%

Commodity	424,384	3.02%

Total	$1,298,629	9.23%

Twelve Months Ended December 31, 2011

Market Sector	High VaR $	Low VaR $	Average VaR* $
Currency	1,897,024	140,764	452,072
Interest Rate	524,034	111,250	201,138
Equity	432,915	47,306	98,639
Commodity	578,250	59,025	267,371
*Average of month-end VaR.

Limitations on Value at Risk as an Assessment of Market Risk

VaR models permit estimation of a portfolio’s aggregate market risk exposure, incorporating a range of varied market risks, reflect risk reduction due to portfolio diversification or hedging activities, and can cover a wide range of portfolio assets. However, VaR risk measures should be viewed in light of the methodology’s limitations, which include, but may not be limited to the following:

·	past changes in market risk factors will not always result in accurate predictions of the distributions and correlations of future market movements;

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·	changes in portfolio value caused by market movements may differ from those of the VaR model;

·	VaR results reflect past market fluctuations applied to current trading positions while future risk depends on future positions;

·	VaR using a one-day time horizon does not fully capture the market risk of positions that cannot be liquidated or hedged within one day; and

·	the historical market risk factor data used for VaR estimation may provide only limited insight into losses that could be incurred under certain unusual market movements.

Non-Trading Risk

The Partnership has non-trading market risk on its foreign cash balances not needed for margin. These balances and any market risk they may represent are immaterial.

A decline in short-term interest rates would result in a decline in the Partnership’s cash management income. This cash flow risk is not considered to be material.

Materiality, as used throughout this section, is based on an assessment of reasonably possible market movements and any associated potential losses, taking into account the leverage, optionality, and multiplier features of the Partnership’s market-sensitive instruments, in relation to the Partnership’s net assets.

Qualitative Disclosures Regarding Primary Trading Risk Exposures

The following qualitative disclosures regarding the Partnership’s market risk exposures - except for (A) those disclosures that are statements of historical fact and (B) the descriptions of how the Partnership

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manages its primary market risk exposures - constitute forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. The Partnership’s primary market risk exposures, as well as the strategies used and to be used by Ceres and the Trading Advisors for managing such exposures, are subject to numerous uncertainties, contingencies and risks, any one of which could cause the actual results of the Partnership’s risk controls to differ materially from the objectives of such strategies. Government interventions, defaults and expropriations, illiquid markets, the emergence of dominant fundamental factors, political upheavals, changes in historical price relationships, an influx of new market participants, increased regulation, and many other factors could result in material losses, as well as in material changes to the risk exposures and the risk management strategies of the Partnership. Investors must be prepared to lose all or substantially all of their investment in the Partnership.

Qualitative Disclosures Regarding Means of Managing Risk Exposure

The Partnership and the Trading Advisors, separately, attempt to manage the risk of the Partnership’s open positions in essentially the same manner in all market categories traded. Ceres attempts to manage market exposure by diversifying the Partnership’s assets among different market sectors and trading approaches through the selection of the commodity trading advisors and by daily monitoring of their performance. In addition, the Trading Advisors establish diversification guidelines, often set in terms of the maximum margin to be committed to positions in any one market sector or market-sensitive instrument.

Ceres monitors and controls the risk of the Partnership’s non-trading instrument, cash. Cash is the only Partnership investment directed by Ceres, rather than the Trading Advisors.

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Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of the management of Ceres, Ceres’ President (Ceres’ principal executive officer) and Chief Financial Officer (Ceres’ principal financial officer) have evaluated the effectiveness of the design and operation of the Partnership’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~June~~September 30, 2012. The Partnership’s disclosure controls and procedures are designed to provide reasonable assurance that information the Partnership is required to disclose in the reports that the Partnership files or submits under the Exchange Act are recorded, processed and summarized and reported within the time period specified in the applicable rules and forms. Based on this evaluation, the President and Chief Financial Officer of Ceres have concluded that the disclosure controls and procedures of the Partnership were effective at ~~June~~September 30, 2012.

Changes in Internal Control over Financial Reporting

There have been no changes during the period covered by this quarterly report in the Partnership’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected or are reasonably likely to materially affect the Partnership’s internal control over financial reporting.

Limitations on the Effectiveness of Controls

Any control system, no matter how well designed and operated, can provide reasonable (not absolute) assurance that its objectives will be met. Furthermore, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

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PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Unless the context otherwise requires, for purposes of this section, the terms the “Company,” “we,” “us” and “our” mean Morgan Stanley and its consolidated subsidiaries. In addition to the matters described in the Form 10-K, those described in the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ending June 30, 2012 (the “Second Quarter Form 10-Q”), and those described below, in the normal course of business, the Company has been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation, arising in connection with its activities as a global diversified financial services institution. Certain of the actual or threatened legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. In some cases, the entities that would otherwise be the primary defendants in such cases are bankrupt or in financial distress.

The Company is also involved, from time to time, in other reviews, investigations and proceedings (both formal and informal) by governmental and self-regulatory agencies regarding the Company’s business, including, among other matters, accounting and operational matters, certain of which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief.

The Company contests liability and/or the amount of damages as appropriate in each pending matter. Where available information indicates that it is probable a liability had been incurred at the date of the condensed consolidated financial statements and the Company can reasonably estimate the amount of that loss, the Company accrues the estimated loss by a charge to income.

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In many proceedings, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount of any loss. The Company cannot predict with certainty if, how or when such proceedings will be resolved or what the eventual settlement, fine, penalty or other relief, if any, may be, particularly for proceedings that are in their early stages of development or where plaintiffs seek substantial or indeterminate damages. Numerous issues may need to be resolved, including through potentially lengthy discovery and determination of important factual matters, determination of issues related to class certification and the calculation of damages, and by addressing novel or unsettled legal questions relevant to the proceedings in question, before a loss or additional loss or range of loss or additional loss can be reasonably estimated for any proceeding. Subject to the foregoing, the Company believes, based on current knowledge and after consultation with counsel, that the outcome of such proceedings will not have a material adverse effect on the consolidated financial condition of the Company, although the outcome of such proceedings could be material to the Company’s operating results and cash flows for a particular period depending on, among other things, the level of the Company’s revenues or income for such period.

Over the last several years, the level of litigation and investigatory activity focused on residential mortgage and credit crisis related matters has increased materially in the financial services industry. As a result, the Company expects that it may become the subject of increased claims for damages and other relief regarding residential mortgages and related securities in the future and, while the Company has identified below certain proceedings that the Company believes to be material, individually or collectively, there can be no assurance that additional material losses will not be incurred from residential mortgage claims that have not yet been notified to the Company or are not yet determined to be material.

The following developments have occurred with respect to certain matters previously reported in the Form 10-K or concern new actions that have been filed since December 31, 2011:

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The following developments have occurred with respect to certain matters previously reported in the Form 10-K or the Second Quarter Form 10-Q or concern new actions that have been filed since the Second Quarter Form 10-Q:

The Company

Residential Mortgage and Credit Crisis Related Matters.

Class Actions.

On ~~March 26~~September 12, 2012, ~~defendants~~the Company filed aits ~~renewed~~answer ~~motion~~ to ~~dismiss~~ the third amended complaint in In re Morgan Stanley ~~ERISA~~Pass-Through Certificates Litigation. On September 20, 2012, the plaintiffs filed a motion seeking to expand the offerings at issue in the litigation, relying on recent precedent from the United States Court of Appeals for the Second Circuit (“Second Circuit”). Defendants have opposed the motion. If the motion is granted, plaintiffs will be purporting to represent investors who purchased approximately $7.82 billion in mortgage pass through certificates issued in 2006 by thirteen trusts.

On April 24, 2012, the court presiding in In re Morgan Stanley Pass-Through Certificate Litigation denied defendants’ motion for reconsideration of its denial-in-part of defendants’ motion to dismiss the second amended complaint. On July 16, 2012, the court denied defendants’ motion to dismiss the third amended complaint.

Other Litigation.

On ~~February 29~~August 17, 2012, ~~U.S.~~the ~~Bank~~court ~~National~~in ~~Association~~Abu Dhabi Commercial Bank, inet ~~its~~al. ~~capacity~~v. asMorgan ~~Trustee~~Stanley ~~(“U~~& Co.S. ~~Bank”)~~Inc., ~~filed~~et aal. ~~summons~~granted ~~with~~the ~~notice~~Company’s onmotion ~~behalf~~for ofsummary ~~Morgan~~judgment ~~Stanley~~with ~~Mortgage~~respect ~~Loan~~to ~~Trust~~the ~~2006-4SL~~plaintiffs’ ~~and~~fraud ~~Mortgage~~claim, ~~Pass-Through~~denied ~~Certificates,~~the ~~Series~~Company’s ~~2006-4SL~~motion ~~(together,~~for ~~the~~summary ~~“Trust”)~~judgment ~~against~~with respect to the ~~Company.~~plaintiffs’ ~~The~~aiding ~~summons~~and ~~with~~abetting ~~notice~~fraud isclaim, ~~styled~~and ~~Morgan~~ordered ~~Stanley~~plaintiffs ~~Mortgage~~to ~~Loan~~show ~~Trust~~cause ~~2006-4SL,~~why etthe ~~al.~~negligent v.misrepresentation ~~Morgan~~claim ~~Stanley~~should ~~Mortgage~~not ~~Capital~~be ~~Inc~~dismissed. ~~and~~The iscourt ~~pending~~dismissed inall ~~New~~or ~~York~~part ~~Supreme~~of ~~Court,~~the ~~New~~claims ~~York~~of ~~County.~~three ~~The~~of ~~notice~~the ~~asserts~~fifteen ~~claims~~plaintiffs ~~for~~based ~~breach~~on lack of ~~contract~~standing or reliance and ~~alleges,~~plaintiffs ~~among~~have ~~other~~moved ~~things,~~for ~~that~~reconsideration of the ~~loans~~dismissal. inOn ~~the~~September ~~Trust~~17, ~~which~~2012, ~~had~~plaintiffs anfiled ~~original~~expert ~~principal~~reports ~~balance~~with ofthe ~~approximately~~court alleging that they are seeking $~~303~~713 million, ~~breached~~in ~~various~~compensatory ~~representations~~damages ~~and~~on ~~warranties~~behalf of all fifteen plaintiffs. ~~The~~On ~~notice~~October ~~seeks~~5, ~~among~~2012, ~~other~~the ~~relief,~~court anruled ~~order~~that ~~requiring~~plaintiffs ~~the~~sufficiently ~~Company~~showed tocause ~~comply~~as ~~with~~to why the ~~loan~~negligent ~~breach~~misrepresentation ~~remedy~~claim ~~procedures~~against in the ~~transaction~~Company ~~documents,~~should ~~unspecified~~not ~~damages,~~be ~~and interest~~dismissed.

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On ~~March 5~~October 2, 2012, the ~~plaintiff~~court in ~~The~~Cambridge ~~Charles~~Place ~~Schwab~~Investment ~~Corp~~Management Inc. v. ~~BNP~~Morgan ~~Paribas~~Stanley ~~Securities~~& ~~Corp~~Co., Inc. et al. ~~filed~~denied, ain ~~second~~substantial ~~amended complaint. On April 10~~part, ~~2012,~~defendants’ ~~the~~motion ~~Company filed a demurrer~~ to ~~certain~~dismiss ~~causes~~plaintiff’s ~~of action in the~~ amended ~~complaint~~complaints.

On ~~March 12~~October 11, 2012, ~~the court presiding in Cambridge Place Investment Management Inc. v. Morgan Stanley & Co., Inc. et al. denied~~ defendants’ ~~motion~~filed motions to dismiss ~~with~~the ~~respect~~amended tocomplaint ~~plaintiff’s~~in ~~standing~~Federal toHome ~~bring~~Loan ~~suit.~~Bank ~~Defendants~~of ~~sought~~Boston ~~interlocutory~~v. ~~appeal~~Ally ~~from that decision on April 11~~Financial, ~~2012~~Inc. OnF/K/A ~~April 26,~~GMAC ~~2012,~~LLC ~~the~~et ~~Company and other defendants filed a second motion to dismiss the amended complaints~~al.

On March 9, 2012, in Federal Home Loan Bank of Boston v. Ally Financial, Inc. F/K/A GMAC LLC et al., the United States District Court for the District of Massachusetts denied plaintiff’s motion to remand the case to state court.

On March 20, 2012, the Company filed answers to the complaints in both cases styled Federal Deposit Insurance Corporation, as Receiver for Franklin Bank S.S.B v. Morgan Stanley & Company LLC F/K/A Morgan Stanley & Co. Inc., denying their allegations. On June 13, 2012, the Company removed Federal Deposit Insurance Corporation, as Receiver for Franklin Bank S.S.B v. Morgan Stanley & Company LLC F/K/A Morgan Stanley & Co. Inc. to the United States District Court for the Southern District of Texas. On June 21, 2012, the Company moved to transfer the action to the United States District Court for the Southern District of New York (the “SDNY”). On July 12, 2012, plaintiff moved to remand the action to Texas state court.

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On April 25, 2012, The Prudential Insurance Company of America and certain affiliates filed a complaint against the Company and certain affiliates in the Superior Court of the State of New Jersey styled The Prudential Insurance Company of America, et al. v. Morgan Stanley, et al. The complaint alleges that defendants made untrue statements and material omissions in connection with the sale to plaintiffs of certain mortgage pass through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by the Company was approximately $1 billion. The complaint raises claims under the New Jersey Uniform Securities Law, as well as common law claims of negligent misrepresentation, fraud and tortious interference with contract and seeks, among other things, compensatory damages, punitive damages, rescission and rescissionary damages associated with plaintiffs’ purchases of such certificates.

On April 25, 2012, Metropolitan Life Insurance Company and certain affiliates filed a complaint against the Company and certain affiliates in the Supreme Court of the State of New York styled Metropolitan Life Insurance Company, et al. v. Morgan Stanley, et al. The complaint alleges that defendants made untrue statements and material omissions in the sale to plaintiffs of certain mortgage pass through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by the Company was approximately $757 million. The complaint raises common law claims of fraud, fraudulent inducement, aiding and abetting fraud and negligent misrepresentation and seeks, among other things, rescission, compensatory and/or rescissionary damages, as well as punitive damages, associated with plaintiffs’ purchases of such certificates.

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On May 1, 2012, Asset Management Fund d/b/a AMF Funds and certain of its affiliated funds filed a summons with notice against the Company in the Supreme Court of the State of New York, styled Asset Management Fund d/b/a AMF Funds et al v. Morgan Stanley et al. The notice alleges that defendants made material misrepresentations and omissions in the sale to plaintiffs of certain mortgage pass through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by the Company to plaintiffs was approximately $122 million. The notice identifies causes of action against the Company for, among other things, common-law fraud, fraudulent inducement, aiding and abetting fraud, and negligent misrepresentation. The notice identifies the relief sought to include, among other things, monetary damages, punitive damages and rescission.

On May 4, 2012, the court in Abu Dhabi Commercial Bank v. Morgan Stanley & Co. Inc., et al. granted the Company’s motion to dismiss claims against the Company for breach of fiduciary duty and negligence, and denied the Company’s motion to dismiss claims against the Company for negligent misrepresentation. On July 2, 2012, plaintiffs filed supplemental disclosures with the Court alleging that they are seeking approximately $811 million in compensatory damages. Plaintiffs are also seeking punitive damages.

On May 4, 2012, the court in King County, Washington, et al. v. IKB Deutsche Industriebank AG, et al., granted the Company’s motion to dismiss claims against the Company for breach of fiduciary duty and negligence, and denied the Company’s motion to dismiss claims against the Company for negligent misrepresentation.

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On June 28, 2012, the court in Federal Home Loan Bank of Chicago v. Bank of America Securities LLC, et al. overruled defendants’ demurrer to plaintiff’s first amended complaint, which demurrer was limited to statute of limitations and statute of repose grounds.

On May 21, 2012, the Company filed a motion to dismiss the complaint in Western and Southern Life Insurance Company, et al. v, Morgan Stanley Mortgage Capital Inc., et al.

On July 13, 2012, the Company filed a motion to dismiss the complaint in Federal Housing Finance Agency, as Conservator v. Morgan Stanley et al. On May 11, 2012, plaintiff withdrew its motion to remand in that action as well as in Federal Housing Finance Agency as Conservator v. General Electric Company et al.

Other Matters.

On April 2, 2012, the Company entered into a Consent Order (“Order”) with the Board of Governors of the Federal Reserve System (“Federal Reserve Board”) relating to the servicing of residential mortgage loans. The terms of the Order are substantially similar and, in many respects, identical to the orders entered into with the Federal Reserve Board by other large U.S. financial institutions. The Order, which is available on the Federal Reserve Board’s website, sets forth various allegations of improper conduct in servicing by Saxon, requires that the Company and its affiliates cease and desist such conduct, and requires that the Company, and its Board of Directors and affiliates, take various affirmative steps. The Order requires (i) the Company to engage an independent third-party consultant to conduct a review of certain foreclosure actions or proceedings that occurred or were pending between January 1, 2009 and December 31, 2010;

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(ii) the adoption of policies and procedures related to management of third parties used to outsource residential mortgage servicing, loss mitigation or foreclosure; (iii) a “validation report” from an independent third-party consultant regarding compliance with the Order for the first year; and (iv) submission of quarterly progress reports as to compliance with the Order by the Company’s Board of Directors. The Order also provides that the Company will be responsible for the payment of any civil money penalties or compensatory payments assessed by the Federal Reserve Board related to such alleged conduct, which penalties or payments have not yet been determined.

Commercial Mortgage Related Matter.

On January 25, 2011, the Company was named as a defendant in The Bank of New York Mellon Trust, National Association v. Morgan Stanley Mortgage Capital, Inc., a litigation pending in the SDNY. The suit, brought by a trustee of a series of commercial mortgage pass-through certificates, alleges that the Company breached certain representations and warranties with respect to an $81 million commercial mortgage loan that was originated and transferred to the trust by the Company. The complaint seeks, among other things, to have the Company repurchase the loan and pay additional monetary damages. On June 27, 2011, the court denied the Company’s motion to dismiss, but directed the filing of an amended complaint. On July 29, 2011, the Company filed its answer to the first amended complaint. Factual discovery concluded on June 18, 2012. The court has indicated that motions for summary judgment are due to be filed by September 21, 2012.

Shareholder Derivative Matter.

On March 22, 2012, the Appellate Division of the Supreme Court of the State of New York affirmed the dismissal of the complaint in Security, Police and Fire Professionals of America Retirement Fund, et al. v. John J. Mack et al.

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China Matter.

As disclosed in February 2009, the Company uncovered actions initiated by an employee based in China in an overseas real estate subsidiary that appeared to have violated the Foreign Corrupt Practices Act. The Company terminated the employee, reported the activity to appropriate authorities and cooperated with the investigations by the United States Department of Justice (“DOJ”) and the United States Securities and Exchange Commission (“SEC”). On April 25, 2012, the DOJ announced that the former employee had pled guilty to certain criminal charges, and the SEC announced that it had brought certain civil charges against the former employee, which have been settled. On the same day, the DOJ and SEC announced that they will not take any action against the Company in connection with this matter.

Item 1A. RISK FACTORS

~~This~~There ~~section~~have ~~includes~~been ~~some~~no ofmaterial changes from the ~~principal~~risk ~~risks~~factors ~~that~~previously ~~investors~~referenced ~~will~~in ~~face~~Part ~~with~~II, anItem ~~investment~~1A, Risk Factors in the Partnership’s Report on Form 10-Q for the quarter ended June 30, 2012 other than as set forth below.

~~Risks~~Speculative ~~Relating~~position ~~to the Partnership~~ and ~~the~~trading ~~Offering~~limits ofmay ~~Units~~reduce profitability.

~~Possible~~The ~~Consequences~~CFTC ofand ~~Using~~U.S. ~~Multiple~~exchanges ~~Trading~~have ~~Advisors. Each~~established ~~Trading~~speculative ~~Advisor~~position ~~makes~~limits ~~trading~~on ~~decisions~~the ~~independent~~maximum ofnet ~~the~~long ~~other~~or ~~Trading~~net ~~Advisors~~short ~~for~~positions ~~the~~which ~~Partnership~~any person may hold or control in particular futures and options on futures. The ~~Thus~~trading instructions of an advisor may have to be modified, itand ispositions ~~possible~~held ~~that~~by the Partnership ~~could~~may ~~hold~~have ~~opposite~~to ~~positions~~be liquidated in ~~the~~order ~~same~~to avoid exceeding these limits. Such modification or ~~similar~~liquidation ~~futures,~~could ~~forwards,~~adversely affect the operations and ~~options,~~profitability ~~thereby~~of ~~offsetting~~the ~~any~~Partnership ~~potential~~by ~~for~~increasing ~~profit~~transaction ~~from~~costs ~~these~~to liquidate positions and foregoing potential profits.

-In 51October -2011, the CFTC adopted new rules governing position limits. In September 2012, these rules were vacated by the United States District Court for the District of Columbia and remanded to the CFTC for

~~You~~- ~~Should~~46 Not Rely on Past Performance of the General Partner or the Trading Advisors In Deciding To Purchase Units. The past investment performance of other entities managed by the General Partner and the Trading Advisors is not necessarily indicative of the Partnership’s future results. No assurance can be given that the General Partner will succeed in meeting the investment objectives of the Partnership. You may lose all or substantially all of your investment in the Partnership.-

~~The~~further ~~General~~consideration. It ~~Partner~~is ~~believes~~possible, nevertheless, that ~~past~~these ~~performance~~rules ~~of the Trading Advisors~~ may betake ofeffect ~~interest~~in tosome ~~investors,~~form ~~but~~via ~~encourages~~re-promulgation ~~you~~or toa ~~look~~successful atappeal ~~such~~by ~~information as an example of~~ the ~~respective~~CFTC ~~objectives~~ of the ~~General~~District ~~Partner~~Court’s ~~and~~ruling. The ~~Trading~~vacated ~~Advisors~~rules ~~rather~~established ~~than~~position aslimits ~~any~~on ~~indication~~certain ~~that~~futures ~~the~~contracts ~~Partnership’s~~and ~~objectives~~any ~~will,~~economically inequivalent ~~fact~~futures, beoptions ~~achieved~~and swaps.

The Partnership Incurs Substantial Charges. The Partnership must pay substantial charges, and must generate profits and interest income which exceed its fixed costs in order to avoid depletion of its assets. The Partnership is required to pay brokerage commissions and monthly management fees to the Trading Advisors regardless of the performance of the Partnership. In addition, the Partnership pays each Trading Advisor an incentive fee. In addition, the Partnership pays the ongoing administrative and operating expenses of the Partnership as such expenses are incurred.

Incentive Fees May be Paid by the Partnership Even Though the Partnership Sustains Trading Losses. The Partnership pays each Trading Advisor an incentive fee based upon the new trading profits it generates for the Partnership. These new trading profits include unrealized appreciation on open positions. Accordingly, it is possible that the Partnership will pay an incentive fee on new trading profits that do not

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become realized. Also, each Trading Advisor will retain all incentive fees paid to it, even if it incurs a subsequent loss after payment of an incentive fee. Due to the fact that incentive fees are paid monthly, it is possible that an incentive fee may be paid to a Trading Advisor during a year in which the assets allocated to such Trading Advisor suffer a loss for the year. Because each Trading Advisor receives an incentive fee based on the new trading profits, the Trading Advisors may have an incentive to make investments that are riskier than would be the case in the absence of such an incentive fee being paid to the Trading Advisors based on new trading profits.

Restricted Investment Liquidity in the Units. There is no secondary market for the Units, and you may not redeem your Units other than as of the last Business Day of each month. Your right to receive payment for a redemption of some or all of your Units is dependent upon (a) the Partnership having sufficient assets to pay its liabilities on the redemption date, and (b) the General Partner’s receipt of your Request for Redemption in the form provided by the General Partner no later than 3:00 p.m., New York City time, on the third Business Day before the end of the month. The General Partner will not permit a transfer, sale, pledge or assignment of Units unless it is satisfied that the transfer, sale, pledge or assignment would not be in violation of Delaware law or applicable federal, state, or foreign securities laws and notwithstanding any transfer, sale, pledge or assignment, the Partnership will continue to be classified as a partnership rather than as an association taxable as a corporation under the Code. No transfer, sale, pledge or assignment of Units will be effective or recognized by the Partnership if the transfer, sale, pledge or assignment would result in the termination of the Partnership for U.S. federal income tax purposes. Any attempt to transfer, sell, pledge or assign Units in violation of the Partnership Agreement will be ineffective.

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General Partner Redemptions. The General Partner is required to maintain a capital contribution at least equal to the greater of: (a) 1% of aggregate capital contributions to the Partnership (including the General Partner’s contribution) and (b) $25,000. The General Partner may otherwise redeem any portion of its investment in the Partnership at any time without notice to the Limited Partners. For any such redemption, the General Partner will redeem its Units at the end of the month in the same manner as any Limited Partner would follow to redeem Units. Additionally, the General Partner has the right to redeem Units it holds in the event redemptions for Limited Partners are suspended.

The Partnership’s Structure Has Conflicts of Interest.

· The General Partner, MSSB, MS&Co., MSCG, and MSIP are affiliates. As a result, the fees and other compensation received by these parties and other terms relating to the operation of the Partnership and the sale of Units have not been negotiated independently.

· MS&Co. and MSCG can benefit from bid/ask spreads to the extent the Trading Advisors execute a substantial portion of OTC foreign exchange trades with MS&Co. and MSCG and bid/ask spreads are charged.

· The Trading Advisors, MS&Co., MSSB, MSCG, MSIP and the General Partner and their affiliates may trade futures, forwards and options for their own accounts, and thereby compete with the Partnership for positions. Also, the other commodity pools managed by the General Partner and the Trading Advisors may compete with the Partnership for futures, forwards, and options positions. These conflicts can result in less favorable prices on the Partnership’s transactions.

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No specific policies regarding conflicts of interest have been adopted by the General Partner, the Partnership, or any of their affiliates, and you will be dependent on the good faith of, and legal and fiduciary obligations imposed on the parties involved with such conflicts to resolve them equitably.

An Investment in Units May Not Diversify an Overall Portfolio. Because futures, forwards and options have historically performed independently of traditional investments in equities and bonds, the General Partner believes that managed futures funds like the Partnership can diversify a traditional portfolio of equities and bonds. However, the General Partner cannot assure you that the Partnership will perform with a significant degree of non- or low-correlation to your other investments in the future. You may lose your entire investment in the Partnership.

The Partnership Is Not A Registered Investment Company. The Partnership is not required to register, and is not registered, as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Accordingly, investors will not have the protections afforded by the Investment Company Act (which, among other matters, requires investment companies to have a majority of disinterested directors and regulates the relationship between the advisor and the investment company).

The Federal Reserve Board’s Regulation of Morgan Stanley Could Affect the Activities of the Partnership. As a financial holding company (“FHC”) under the Bank Holding Company Act, Morgan Stanley and its affiliates are subject to the comprehensive, consolidated supervision and regulation of the Board of Governors of the Federal Reserve System (“Federal Reserve”). A significant focus of this regulatory framework is the operation of Morgan Stanley and its subsidiaries in a safe and sound manner,

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with sufficient capital, earnings and liquidity that Morgan Stanley may serve as a source of financial and managerial strength to Morgan Stanley Bank, N.A. and Morgan Stanley Private Bank, National Association (the “Banks”). These Banks must remain well capitalized and well managed if Morgan Stanley is to maintain its FHC status and continue to engage in the widest range of permissible financial activities. In addition, the general exercise by the Federal Reserve of its regulatory, supervisory and enforcement authority with respect to Morgan Stanley and certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act” or the “Act”) could result in changes to Morgan Stanley’s business practices or the scope of its current lines of business, including certain limited divestitures. Although such changes could have an impact on and consequences for Morgan Stanley, the General Partner and the Partnership, any limited divestiture should not directly involve the Partnership.

The enactment of the Dodd-Frank Act will result in enhanced regulation by the Federal Reserve and, with respect to the Banks, may result in enhanced regulation by the Office of the Comptroller of the Currency (“OCC”). The Act will require that, in order to maintain FHC status, Morgan Stanley (as well as the Banks) be well capitalized and well managed, as those terms are defined by the Federal Reserve. The Dodd-Frank Act also grants the Federal Reserve greater regulatory authority over the subsidiaries of a bank holding company. Additionally, because it is a bank holding company with more than $50 billion in consolidated assets, Morgan Stanley is subject to enhanced supervision by and more stringent prudential standards to be established by the Federal Reserve. The Federal Reserve is required to apply higher capital requirements to bank holding companies with more than $50 billion in consolidated assets than to other bank holding companies.

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The Units (1) are not FDIC insured, (2) are not deposits or other obligations of the Banks, (3) are not guaranteed by the Banks, and (4) involve investment risks, including possible loss of principal.

Assets Held in Accounts at U.S. Banks May Not Be Fully Insured. The assets of the Partnership that are deposited with commodity brokers or their affiliates may be placed in deposit accounts at U.S. banks. The Federal Deposit Insurance Corporation (“FDIC”) insures deposits held at its member banks for up to $250,000 (including principal and accrued interest) for each insurable capacity (e.g., individual accounts, joint accounts, corporate accounts, etc.). If the FDIC were to become receiver of a U.S. bank holding deposit accounts that were established by a commodity broker or one of its affiliates, then it is uncertain whether the commodity broker, the affiliate involved, the Partnership, or the investor would be able to reclaim cash in the deposit accounts above $250,000.

Risks Relating to Futures Interests Trading and the Futures Interests Markets

Futures Interests Trading is Speculative and Volatile. The rapid fluctuations in the market prices of futures, forwards, and options make an investment in the Partnership volatile. Volatility is caused by, among other things, changes in supply and demand relationships; weather; agricultural, trade, fiscal, monetary and exchange control programs; domestic and foreign political and economic events and policies; and changes in interest rates. If a Trading Advisor incorrectly predicts the direction of prices in futures, forwards, and options, large losses may occur. The Partnership’s performance will be volatile on a monthly and an annual basis. The Partnership could lose all or substantially all of its assets.

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The Partnership’s Futures Interests Trading is Highly Leveraged. Trading Advisors may use substantial leverage in trading the Partnership’s assets. Trading futures, forwards, and options involves substantial leverage, which could result in immediate and substantial losses. Due to the low margin deposits normally required in trading futures, forwards, and options (typically between 2% and 15% of the value of the contract purchased or sold), an extremely high degree of leverage is typical of a futures interests trading account. As a result, a relatively small price movement in futures, forwards, and options may result in immediate and substantial losses to the investor. For example, if 10% of the face value of a contract is deposited as margin for that contract, a 10% decrease in the value of the contract would cause a total loss of the margin deposit. A decrease of more than 10% in the value of the contract would cause a loss greater than the amount of the margin deposit.

The leverage employed by the Trading Advisors in their trading can vary substantially from month to month. This leverage, expressed as the underlying value of the Partnership’s positions compared to the average net assets of the Partnership, is anticipated to range from two times the Partnership’s net assets to ten times the Partnership’s net assets. Under certain conditions, however, the Partnership’s leverage could exceed (or be less than) such range.

Options Trading Can be More Volatile than Futures Trading. The Partnership may trade options on futures. Although successful options trading requires many of the same skills as successful futures trading, the risks are different. Successful options trading requires a trader to assess accurately near-term market volatility because that volatility is immediately reflected in the price of outstanding options. Correct assessment of market volatility can therefore be of much greater significance in trading options than it is in

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many long-term futures strategies where volatility does not have as great an effect on the price of a futures contract.

Market Illiquidity May Cause Less Favorable Trade Prices. Although the Trading Advisors generally will purchase and sell actively-traded contracts where last trade price information and quoted prices are readily available, the price at which a sale or purchase occurs may differ from the price expected because there may be a delay between receiving a quote and executing a trade, particularly in circumstances where a market has limited trading volume and prices are often quoted for relatively limited quantities. In addition, most U.S. futures exchanges have established “daily price fluctuation limits” which preclude the execution of trades at prices outside of the limit, and, from time to time, the CFTC or the exchanges may suspend trading in market disruption circumstances. In these cases it is possible that the Partnership could be required to maintain a losing position that it otherwise would execute and incur significant losses or be unable to establish a position and miss a profit opportunity.

Trading on Foreign Exchanges Presents Greater Risks to the Partnership than Trading on U.S. Exchanges. The Partnership trades on exchanges located outside the United States. Trading on U.S. exchanges is subject to CFTC regulation and oversight, including, for example, minimum capital requirements for commodity brokers, segregation of customer funds, regulation of trading practices on the exchanges, prohibitions against trading ahead of customer orders, prohibitions against filling orders off exchanges, prescribed risk disclosure statements, testing and licensing of industry sales personnel and other industry professionals, and recordkeeping requirements. Trading on foreign exchanges is not

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regulated by the CFTC or any other U.S. governmental agency or instrumentality and may be subject to regulations that are different from those to which U.S. exchange trading is subject, provide less protection to investors than trading on U.S. exchanges, and may be less vigorously enforced than regulations in the U.S.

The percentage of the Partnership’s positions which are traded on foreign exchanges can vary significantly from month to month.

Positions on foreign exchanges also are subject to the risk of, among other things, exchange controls, expropriation, excessive taxation or government disruptions. The Partnership may incur losses when determining the value of its foreign positions in U.S. dollars because of fluctuations in exchange rates.

The Unregulated Nature of the Over-The-Counter Markets Creates Counterparty Risks that Do Not Exist in Futures Trading on Exchanges. Unlike futures contracts, OTC “spot” and forward contracts are entered into between private parties off an exchange and are not regulated by the CFTC or by any other U.S. or foreign governmental agency. Due to the fact that such contracts are not traded on an exchange, the performance of those contracts is not guaranteed by an exchange or its clearinghouse and the Partnership is at risk with respect to the ability of the counterparty to perform on the contract, including the creditworthiness of the counterparty. Trading in the OTC foreign exchange markets is not regulated; therefore, there are no specific standards or regulatory supervision of trade pricing and other trading

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activities that occur in those markets. The Partnership trades such contracts with MS&Co. and MSCG, and is at risk with respect to the creditworthiness and trading practices of each of MS&Co. and MSCG as the counterparty to the contracts. The relative exposure of the Partnership to contracts that are not cleared by a registered clearing firm is approximately 18.32%.

The Dodd-Frank Act will affect the manner in which OTC swap transactions are traded and the credit risk associated with such trading. Depending upon actions taken by regulatory authorities, these changes may also affect the manner of trading of OTC foreign currency transactions. Transactions that have been entered into prior to implementation of the provisions of the Dodd-Frank Act will remain in effect. Accordingly, even after the new regulatory framework is fully implemented, the risks of OTC foreign exchange transactions will continue to be considerations with respect to transactions entered into prior to the implementation of the provisions of the Dodd-Frank Act. The implementation of these provisions could adversely affect the Partnership by increasing transaction and compliance costs.

Trading Swaps Creates Distinctive Risks. The Trading Advisors may trade in certain swaps. Currently, swaps are not traded on exchanges and are not subject to the same type of government regulation as exchange markets. As a result, many of the protections afforded to participants on organized exchanges and in a regulated environment are not available in connection with these transactions. The swap markets are “principals’ markets,” in which performance with respect to a swap is the responsibility only of the counterparty to the contract, and not of any exchange or clearinghouse. The Partnership is subject to the risk of the inability or refusal to perform with respect to swaps on the part of the counterparties, and until such time as these transactions are cleared or guaranteed by an exchange, the Partnership will be subject to

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the risk of counterparty default on its swaps. In some swap transactions the counterparty may require the Partnership to deposit collateral to support the Partnership’s obligations under the swap agreement. If the counterparty to such a swap defaults, the Partnership would lose the net amount of payments that the Partnership is contractually entitled to receive and could lose, in addition, any collateral deposits made with the counterparty. There are no limitations on daily price movements in swaps. Speculative position limits are not applicable to swaps. Participants in the swap markets are not required to make continuous markets in the swaps they trade.

However, the regulation of swaps will be subject to substantial change under recently-enacted legislation and pending regulatory action. These new requirements will alter the manner in which swaps will be traded. Under the Dodd-Frank Act, many commodity swaps will be required to be cleared through clearing houses and executed on designated contract markets or swap execution facilities. Security-based swaps will be subject to similar requirements as will apply to commodity swaps. Additional regulatory requirements will apply to all swaps, whether subject to mandatory clearing, or not. These include margin, collateral and capital requirements, reporting obligations for certain swaps, speculative position limits, and other regulatory requirements. Swaps which are not offered for clearing by a clearing house will continue to be able to be traded bi-laterally. Such bi-lateral transactions will remain subject to many of the risks discussed in the preceding paragraph.

Deregistration of the Commodity Pool Operator or the Commodity Trading Advisors Could Disrupt Operations. The General Partner is a registered commodity pool operator and registered commodity trading advisor and each Trading Advisor is a registered commodity trading advisor. If the CFTC were to

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terminate, suspend, revoke or not renew the registration of the General Partner, the General Partner would withdraw as general partner of the Partnership. The Limited Partners would then determine whether to select a replacement general partner or to dissolve the Partnership. If the CFTC were to terminate, suspend, revoke or not renew the registration of a Trading Advisor, the General Partner would terminate such Trading Advisor’s advisory agreement with the Partnership. The General Partner could reallocate the Partnership’s assets managed by the deregistered Trading Advisor to new trading advisor(s) or terminate the Partnership. No action is currently pending or threatened against the General Partner or any of the Trading Advisors.

The Partnership is Subject to Speculative Position Limits. The CFTC and U.S. futures exchanges have established speculative position limits (referred to as “position limits”) on the maximum position in certain Futures Interests contracts that may be held or controlled by any one person or group. Therefore, the Trading Advisors may have to reduce the size of their position in one or more futures contracts in order to avoid exceeding such position limits, which could adversely affect the profitability of the Partnership. In fall 2011, the CFTC adopted new position limits with respect to certain metal, energy, and agricultural contracts. The CFTC or the relevant futures exchange may amend or adjust these position limits or the interpretation of how such limits are applied, which could adversely affect the profitability of the Partnership.

The Partnership has Credit Risk to the Commodity Brokers. The Partnership has credit risk because the commodity brokers act as the futures commission merchants for futures transactions or the counterparties of OTC transactions, with respect to most of the Partnership’s assets. As such, in the event

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that the commodity brokers are unable to perform, the Partnership’s assets are at risk and, in such event, investors may only recover a pro rata share of their investment in the Partnership or nothing at all. Exchange-traded futures and futures-styled option contracts are marked to market on a daily basis, with variations in value credited or charged to the Partnership’s account on a daily basis. The commodity brokers, as futures commission merchants for the Partnership’s exchange-traded contracts, are required, pursuant to CFTC regulations, to segregate from their own assets, and for the sole benefit of their commodity customers, all funds held by them with respect to exchange-traded futures and futures-styled options contracts, including an amount equal to the net unrealized gain on all open futures and futures-styled options contracts. With respect to the Partnership’s OTC foreign exchange contracts with MS&Co. and MSCG, prior to implementation of the Dodd-Frank Act’s provisions, there are no daily settlements of variations in value, and there is no requirement to segregate funds held with respect to such contracts. In the event of a shortfall in segregated customer funds held by the futures commission merchant, the Partnership’s assets on account with the futures commission merchant may be at risk, and in such event, the Partnership may only recover a pro rata share of the available customer funds.

Risks Relating to the Trading Advisors

Since the future performance of the Trading Advisors is unpredictable, the Trading Advisors’ past performance is not necessarily indicative of future results.

Reliance on the Trading Advisors to Trade Successfully. The Trading Advisors are responsible for making all futures, forwards, and options trading decisions on behalf of the Partnership. The General Partner has no control over the specific trades the Trading Advisors may make, leverage used, risks and/or

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concentrations assumed or whether the Trading Advisors will act in accordance with the disclosure documents or descriptive materials furnished by them to the General Partner. The General Partner can provide no assurance that the trading program employed by the Trading Advisors will be successful. The Trading Advisors, in turn, are dependent upon the services of a limited number of persons to develop and refine their trading approaches and strategies and execute the trading transactions. The loss of the services of any of the Trading Advisors’ principals or key employees, or the failure of those principals or key employees to function effectively as a team, may have an adverse effect on the Trading Advisors’ ability to manage their trading activities successfully, or may cause a Trading Advisor to cease operations entirely. This, in turn, could negatively affect the Partnership’s performance.

Market Factors May Adversely Influence the Trading Advisors’ Trading Programs. In the past, there have been periods when market conditions have not been favorable to the Trading Advisors’ respective strategies, and such periods may recur. The past performance of such trading strategies is not necessarily indicative of their future profitability, and no trading program can consistently determine which commodity to trade or when to enter into the trade. Often, the most unprofitable market conditions for the Partnership are those in which prices “whipsaw,” that is, such price moves quickly upward (or downward), then reverses, then moves upward (or downward) again, then reverses again. In such conditions, the Trading Advisors may establish positions based on incorrectly identifying both the brief upward or downward price movements as trends, whereas in fact no trends sufficient to generate profits develop. Any factor which may lessen the prospect of favorable conditions in the future (such as lack of major price trends or increased governmental control of, or participation in, the markets) may reduce the Trading Advisors’ ability to trade profitably in the future.

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Increasing the Assets Managed by the Trading Advisors May Adversely Affect Their Performance. The rates of return achieved by commodity trading advisors often diminish as the assets under their management increase. This can occur for many reasons, including the inability of the trading advisor to execute larger position sizes at desired prices and because of the need to adjust the trading advisor’s trading program to avoid exceeding speculative position limits. These are limits established by the CFTC and the exchanges on the number of speculative futures and options contracts in a commodity that one trader may own or control. The Trading Advisors have not agreed to limit the amount of additional assets that they will manage.

You Will Not be Aware of Changes to the Trading Advisors’ Trading Programs. Because of the proprietary nature of the Trading Advisors’ trading programs, you generally will not be advised if adjustments are made to the Trading Advisors’ trading programs in order to accommodate additional assets under management or for any other reason.

The Trading Advisors May Terminate Their Advisory Agreements. The advisory agreements with the Trading Advisors automatically renew annually unless terminated by the General Partner or the relevant Trading Advisor. In the event an advisory agreement is not renewed, the General Partner may not be able to enter into an arrangement with the relevant Trading Advisor or another trading advisor on terms substantially similar to the previous advisory agreement.

Disadvantages of Replacing or Switching Trading Advisors. The Trading Advisors are required to recoup previous trading losses before they can earn performance-based compensation. However, the

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General Partner may elect to replace a Trading Advisor if it has a “loss carry-forward.” In that case, the Partnership would lose the “free ride” of any potential recoupment of the prior losses. In addition, the new trading advisor(s) would earn performance-based compensation on the first dollars of investment profits. The effect of the replacement of or the reallocation of assets away from a Trading Advisor therefore could be significant.

Partnership Performance May Be Hindered by Increased Competition for Positions. Assets in managed futures have grown from an estimated $300 million in 1980 to over $291 billion in 2011. This has resulted in increased trading competition. Since futures are traded in an auction-like market, the more competition there is for some contracts, the more difficult it is for the Trading Advisors to obtain the best prices for the Partnership. The Trading Advisors are required to use an allocation methodology that is fair to all customers.

You Will Not Have Access to the Partnership’s Positions and Must Rely on the General Partner to Monitor the Trading Advisors. As a Limited Partner, you will not have access to the Partnership’s trade positions. Consequently, you will not know whether the Trading Advisors are adhering to the Partnership’s trading policies and must rely on the ability of the General Partner to monitor trading and protect your investment.

Taxation Risks

You May Have Tax Liability Attributable To Your Interest in the Partnership Even If You Have Received No Distributions and Redeemed No Units and Even if the Partnership Generated a Loss. If

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the Partnership has profit for a taxable year, the profit will be includible in your taxable income, whether or not cash or other property is actually distributed to you by the Partnership. The General Partner presently does not intend to make any distributions from the Partnership. Accordingly, it is anticipated that U.S. federal income taxes on your allocable share of the Partnership’s profits will exceed the amount of distributions to you, if any, for a taxable year, so that you must be prepared to fund any tax liability from redemptions of Units or other sources. In addition, the Partnership may have capital losses from trading activities that cannot be deducted against the Partnership’s ordinary income (e.g., interest income, periodic net swap payments) so that you may have to pay taxes on ordinary income even if the Partnership generates a net loss.

The Partnership’s Tax Returns Could be Audited. The IRS could audit the Partnership’s U.S. federal income tax returns. If an audit results in an adjustment to the Partnership’s tax return, Limited Partners in the Partnership could be required to file amended returns and pay additional tax.

You Will Recognize Short-Term Capital Gain. Profits on futures contracts traded in regulated U.S. and some foreign exchanges, foreign currency contracts traded in the interbank market, and U.S. and some foreign exchange-traded options on commodities are generally taxed as short-term capital gain to the extent of 40% of gains with respect to section 1256 contracts and at least 50% of the gain arising from a mixed straddle account and are currently taxed at a maximum marginal ordinary U.S. federal income tax rate of 35%.

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The IRS Could Take the Position that Deductions for Certain Partnership Expenses Are Subject To Various Limitations. Non-corporate taxpayers are subject to certain limitations for deductions for “investment advisory expenses” for U.S. federal income tax and alternative minimum tax purposes. The IRS could argue that certain Partnership expenses are investment advisory expenses. Prospective investors should discuss with their tax advisors the tax consequences of an investment in the Partnership.

Tax Laws Are Subject To Change at Any Time, Including Already Enacted Changes Scheduled to Take Effect in 2013. Tax laws and court and IRS interpretations thereof are subject to change at any time, possibly with retroactive effect. For example, various tax rate reductions for non-corporate taxpayers enacted in 2001 and 2003 are scheduled to expire for taxable years beginning after December 31, 2012. Further, the maximum ordinary income rates for non-corporate taxpayers are scheduled to increase from 35% to 39.6%, and the maximum long-term capital gains rates are scheduled to increase from 15% to 20%. Prospective investors are urged to discuss scheduled and potential tax law changes with their tax advisors.

Non-U.S. Investors May Face Exchange Rate Risk and Local Tax Consequences. Non-U.S. investors should note that Units are denominated in U.S. dollars and that changes in rates of exchange between currencies may cause the value of their investment to decrease or to increase. Non-U.S. investors should consult their own tax advisors concerning the applicable U.S. and foreign tax implications of this investment.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

-Item 695. OTHER -INFORMATION

The registrant does not have a board of directors. The registrant’s general partner, Ceres Managed Futures LLC, is managed by a board of directors.

Effective November 14, 2012, Mr. Damian George will be appointed a director of Ceres.

Damian George, age 45, has been a Director of the General Partner since November 2012. Since June 2012, Mr. George has been the Chief Financial Officer and a principal of the General Partner and is an associate member of the National Futures Association. Since August 2009, Mr. George has been employed by Morgan Stanley Smith Barney LLC (“Morgan Stanley Smith Barney”), a financial services firm, where his responsibilities include oversight of budgeting, finance and Sarbanes-Oxley testing for the Alternative Investments–Managed Futures group. Since August 2009, Mr. George has been registered as an associated person of Morgan Stanley Smith Barney. From November 2005 through July 2009, Mr. George was employed by Citi Alternative Investments, a division of Citigroup Inc. (“Citigroup”), a financial services firm, which administered Citigroup’s hedge fund and fund of funds business, where he

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served as Director and was responsible for budgeting, finance and Sarbanes-Oxley testing for the Hedge Fund Management group. From November 2004 through July 2009, Mr. George was registered as an associated person of Citigroup Global Markets Inc. Mr. George earned his Bachelor of Science degree in Accounting in May 1989 from Fordham University and his Master of Business Administration degree in International Finance in February 1998 from Fordham University. Mr. George is a Certified Public Accountant.

Item 6.

EXHIBITS

31.01

Certification of President of Ceres Managed Futures LLC, the General Partner of the Partnership, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.02

Certification of Chief Financial Officer of Ceres Managed Futures LLC, the General Partner of the Partnership, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.01

Certification of President of Ceres Managed Futures LLC, the General Partner of the Partnership, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.02

Certification of Chief Financial Officer of Ceres Managed Futures LLC, the General Partner of the Partnership, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*

XBRL Instance Document

101.SCH*

XBRL Taxonomy Extension Schema Document

101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB*

XBRL Taxonomy Extension Label Document

101.PRE*

XBRL Taxonomy Extension Presentation Document

101.DEF*

XBRL Taxonomy Extension Definition Document

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Notes to Exhibits List

* Submitted electronically herewith.

Pursuant to applicable securities laws and regulations, the Partnership is deemed to have complied with the reporting obligation relating to the submission of interactive data files in Exhibit 101 to this report and is not subject to liability under any anti-fraud provisions of the federal securities laws as long as the Partnership has made a good faith attempt to comply with the submission requirements and promptly amends the interactive data files after becoming aware that the interactive data files fails to comply with the submission requirements. Users of this data are advised that, pursuant to Rule 406T, these interactive data files are deemed not filed and otherwise are not subject to liability.

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SIGNATURE

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.

	Morgan Stanley Smith Barney Spectrum Global Balanced L.P.
	(Registrant)
	By:	Ceres Managed Futures LLC
		(General Partner)
August 13, 2012	By:	/s/Damian George
November 13, 2012	By:	/s/Damian George
		Damian George
		Chief Financial Officer

The General Partner which signed the above is the only party authorized to act for the registrant. The registrant has no principal executive officer, principal financial officer, controller, or principal accounting officer and has no Board of Directors.

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