~~Table~~UNITED ~~of Contents~~STATES

~~UNITED~~SECURITIES ~~STATES~~AND EXCHANGE COMMISSION

~~SECURITIES~~Washington, ~~AND~~D.C. ~~EXCHANGE COMMISSION~~ 20549

~~Washington,~~FORM ~~D.C. 20549~~ 10-K

~~FORM~~x ANNUAL ~~10-K~~REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~(X)~~For ~~ANNUAL~~the ~~REPORT~~fiscal ~~PURSUANT~~year TOended ~~SECTION~~December 1331, OR2012 ~~15(d)~~ or

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

For the ~~fiscal~~transition ~~year~~period ~~ended~~from ~~December 31, 2011 or~~ __________________to__________________

(Commission )file ~~TRANSITION~~number: ~~REPORT PURSUANT TO SECTION 13 OR 15(d)~~ 0-26340

OF THE SECURITIES EXCHANGE ACT OF 1934

		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)

For the transition period from to

Registrant’s telephone number, including area code		(855) 672-4468

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Name of each exchange
		on which registered

None		None

~~Commission file~~Securities ~~number:~~registered ~~0-26340~~pursuant to Section 12(g) of the Act:

~~MORGAN~~Units ~~STANLEY~~of ~~SMITH~~Limited ~~BARNEY~~Partnership ~~SPECTRUM GLOBAL BALANCED L.P.~~ Interest

(~~Exact~~Title ~~name~~ of ~~registrant as specified in its charter~~Class)

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)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(~~212~~d) ~~296-1999~~of ~~Registrant’s~~the ~~telephone~~Act. Yes ~~number,~~o ~~including~~No ~~area code~~x

~~Securities~~Indicate ~~registered~~by ~~pursuant~~check mark whether the registrant (1) has filed all reports required to be filed by Section 12 13 or 15(bd) 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

~~Title~~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 ~~each~~Registration ~~class~~S-T ~~Name~~(§232.405 of ~~each~~this ~~exchange~~chapter) onduring ~~which~~the ~~registered~~preceding ~~None~~12 ~~None~~months (or for such shorter period that the registrant was required to submit and post such files) Yes x No o

~~Securities~~Indicate ~~registered~~by check mark if disclosure of delinquent filers pursuant to ~~Section 12~~Item 405 of Regulation S-K (g)§229.404 of this chapter) is not contained herein, and will not be contained, to the ~~Act:~~best ~~Units~~of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of ~~Limited~~this ~~Partnership~~Form ~~Interest~~10-K or any amendment to this Form 10-K. x

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

~~Indicate~~Large byaccelerated ~~check~~filer ~~mark~~o ifAccelerated ~~the~~filer ~~registrant~~o ~~is a well~~Non-~~known~~accelerated ~~seasoned~~filer ~~issuer,~~x asSmaller ~~defined~~reporting incompany ~~Rule 405 of the Securities Act.~~ 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 X T

~~Indicate~~State bythe ~~check~~aggregate ~~mark~~market ifvalue of the Units of Limited Partnership Interest held by non-affiliates of the registrant. The isaggregate ~~not~~market ~~required~~value toshall ~~file~~be ~~reports~~computed ~~pursuant~~by reference to ~~Section 13~~the orprice ~~Section 15(d)~~at which Units were sold as of the ~~Act.~~last business day of the registrant’s most recently completed second fiscal quarter: $12,369,618 at June 30, 2012.

~~Yes No X~~As of February 28, 2013, 746,817.658 Limited Partnership Redeemable Units were outstanding.

~~Indicate~~DOCUMENTS byINCORPORATED ~~check~~BY 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. REFERENCE

~~Yes X No~~ (See Page 1)

~~Indicate~~MORGAN bySTANLEY ~~check~~SMITH ~~mark~~BARNEY ~~whether~~SPECTRUM ~~the~~GLOBAL ~~registrant~~BALANCED ~~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 Registration S-T (§232~~L.~~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)~~ P.

~~Yes X No~~ INDEX TO ANNUAL REPORT ON FORM 10-K

~~Indicate~~December ~~by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.404 of this chapter) is not contained herein~~31, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] 2012

~~Indicate~~DOCUMENTS byINCORPORATED ~~check~~BY ~~mark~~REFERENCE ~~whether~~…………………………………………………………… the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. 1

Large accelerated filer Accelerated filer Non-accelerated filer X Smaller reporting company

Part I.

Item 1.	Business	2-6

Item 1A.	Risk Factors	6-25

Item 1B.	Unresolved Staff Comments	25

Item 2.	Properties	25

Item 3.	Legal Proceedings	25-35

Item 4.	Mine Safety Disclosures	35


Part II.

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	36

Item 6.	Selected Financial Data	37

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	38-59

Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	59-68

Item 8.	Financial Statements and Supplementary Data	69

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	69

Item 9A.	Controls and Procedures	70-71

Item 9B.	Other Information	71


Part III.

Item 10.	Directors, Executive Officers and Corporate Governance	72-82

Item 11.	Executive Compensation	82

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	82

Item 13.	Certain Relationships and Related Transactions, and Director Independence	82-83

Item 14.	Principal Accountant Fees and Services	83

Part IV.

Item 15.	Exhibits, Financial Statement Schedules	84

~~Indicate~~DOCUMENTS byINCORPORATED ~~check~~BY ~~mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).~~ REFERENCE

~~Yes No~~Portions Xof the following documents are incorporated by reference as follows:

~~State~~ Documents ~~the~~Incorporated Part ~~aggregate market value~~ of ~~the~~Form ~~Units of Limited Partnership Interest held by non~~10-affiliates of the registrant. The aggregate market value shall be computed by reference to the price at which Units were sold as of the last business day of the registrant’s most recently completed second fiscal quarter: $15,739,660 at June 30, 2011. K

~~DOCUMENTS~~Annual ~~INCORPORATED~~Report BYto ~~REFERENCE~~Morgan Stanley

~~(See~~Smith ~~Page~~Barney 1)Spectrum Series Limited Partners

~~Table~~for ofthe ~~Contents~~year ended December 31, 2012 II, III, and IV

~~MORGAN~~- ~~STANLEY~~1 ~~SMITH BARNEY SPECTRUM GLOBAL BALANCED L.P.~~ -

~~INDEX~~PART ~~TO ANNUAL REPORT ON FORM 10-K~~ I

~~December 31,~~Item ~~2011~~ 1. BUSINESS

DOCUMENTS INCORPORATED BY REFERENCE		1
Part I.
Item 1.	Business	2-6
Item 1A.	Risk Factors	6-7
Item 1B.	Unresolved Staff Comments	7
Item 2.	Properties	7
Item 3.	Legal Proceedings	7-32
Item 4.	Mine Safety Disclosures	33
Part II.
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	34
Item 6.	Selected Financial Data	35
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36-58
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	58-69
Item 8.	Financial Statements and Supplementary Data	70
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	70
Item 9A.	Controls and Procedures	71-73
Item 9B.	Other Information	73
Part III.
Item 10.	Directors, Executive Officers and Corporate Governance	74-83
Item 11.	Executive Compensation	83
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	83
Item 13.	Certain Relationships and Related Transactions, and Director Independence	83
Item 14.	Principal Accountant Fees and Services	84
Part IV.
Item 15.	Exhibits, Financial Statement Schedules	85

(a) General Development of Business. Morgan Stanley Smith Barney Spectrum Global Balanced L.P. (the “Partnership”) 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 Interest”). The Partnership commenced trading operations on November 2, 1994. The Partnership is one of the Morgan Stanley 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”).

~~Table~~Ceres Managed Futures LLC, a Delaware limited liability company, acts as the general partner (“Ceres” or the “General Partner”) and commodity pool operator for the Partnership. Ceres is a wholly-owned subsidiary of ~~Contents~~Morgan Stanley Smith Barney LLC (“MSSBH”). MSSBH is majority-owned indirectly by Morgan Stanley and minority-owned indirectly by Citigroup Inc. Morgan Stanley Smith Barney LLC is doing business as Morgan Stanley Wealth Management (“Morgan Stanley Wealth Management”). This entity, where the Partnership continues to maintain a cash account, previously acted as a non-clearing 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

~~DOCUMENTS~~- ~~INCORPORATED~~2 ~~BY REFERENCE~~ -

~~Portions~~Stanley Capital Group Inc. (“MSCG”) acts as the counterparty on all trading of options on foreign currency forward contracts. MSIP serves as the ~~following~~commodity ~~documents~~broker for trades on the London Metal Exchange. Morgan Stanley Wealth Management is the principal subsidiary of MSSBH. MS&Co., MSIP, and MSCG are ~~incorporated~~wholly-owned bysubsidiaries ~~reference~~of asMorgan ~~follows:~~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”). A description of the trading activities and focus of each Trading Advisor begins on page 40 under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Documents Incorporated		Part of Form 10-K
Annual Report to Morgan Stanley Smith Barney Spectrum Series Limited Partners for the year ended December 31, 2011		II, III, and IV

The General Partner, on behalf of the Partnership, has entered into a management agreement with each Trading Advisor (each, a “Management Agreement”). Each Management Agreement provides that the Trading Advisor has sole discretion in determining the investments of the assets of the Partnership allocated to the Trading Advisor by the General Partner. Pursuant to each Management Agreement, the Partnership pays each Trading Advisor a flat-rate monthly management fee and an incentive fee. The management fee for the Partnership is accrued at a rate of 1/12 of 1.25% per month of net assets allocated to SSARIS on the first day of each month (a 1.25% annual rate), 1/12 of 1.25% per month of net assets allocated to Altis on the first day of each month (a 1.25% annual

-rate), and 1/12 of 2% per month of net assets allocated to C- View on the first day of each month (a 2% annual rate).

~~Table~~- of3 ~~Contents~~-

~~PART~~In Iaddition, the Partnership pays a monthly incentive fee equal to 15% of the trading profits experienced with respect to the net assets allocated to SSARIS as of the end of each calendar month, and 20% of the trading profits experienced with respect to the net assets allocated to Altis and C-View as of the end of each calendar month.

~~Item 1~~Trading profits represent the amount by which profits from futures, forwards, and options trading exceed losses after brokerage and management fees are deducted. For ~~BUSINESS~~all trading advisors with trading losses, no incentive fee is paid in subsequent months until all such losses are recovered. Cumulative trading losses are adjusted on a pro rata basis for the net amount of each month’s redemptions.

~~(a)~~The ~~General~~current ~~Development~~term of ~~Business.~~the ~~Morgan~~Management ~~Stanley~~Agreement ~~Smith~~with ~~Barney~~SSARIS ~~Spectrum~~will ~~Global~~expire ~~Balanced~~on ~~L.P.~~November ~~(the~~30, ~~“Partnership”)~~2013 isand awill ~~Delaware~~renew ~~limited~~annually ~~partnership~~unless ~~organized~~terminated inby ~~1994~~the toGeneral ~~engage~~Partner ~~primarily in~~or the ~~speculative~~Trading ~~trading~~Advisor. The ofcurrent ~~futures~~term ~~contracts,~~of ~~options~~the onManagement ~~futures~~Agreement ~~and~~with ~~forward~~C-View ~~contracts,~~will ~~and~~expire ~~forward contracts~~ on ~~physical~~December ~~commodities and other commodity interests~~31, ~~including,~~2013 ~~but not limited to, foreign currencies, financial instruments, metals, energy,~~ and ~~agricultural~~will ~~products~~renew ~~(collectively,~~annually ~~“Futures~~unless ~~Interest”).~~terminated ~~The~~by ~~Partnership~~the ~~commenced~~General ~~trading~~Partner ~~operations~~or onthe ~~November 2,~~Trading ~~1994~~Advisor. The ~~Partnership~~current isterm ~~one~~ of the ~~Morgan~~Management ~~Stanley~~Agreement ~~Smith~~with ~~Barney~~Altis ~~Spectrum~~will ~~series~~expire ofon ~~funds,~~October ~~comprised of the Partnership~~9, ~~Morgan~~2013 ~~Stanley Smith Barney Spectrum Currency~~ and ~~Commodity~~will ~~L.P.,~~renew ~~Morgan~~annually ~~Stanley~~unless ~~Smith~~terminated ~~Barney~~by ~~Spectrum~~the ~~Select~~General ~~L.P.,~~Partner ~~Morgan~~or ~~Stanley~~the ~~Smith~~Trading ~~Barney Spectrum Strategic L~~Advisor.P. In general, ~~and~~each ~~Morgan~~Management ~~Stanley~~Agreement ~~Smith~~may ~~Barney~~be ~~Spectrum~~terminated ~~Technical~~upon ~~L.P. (collectively,~~notice ~~the~~by ~~“Spectrum~~either ~~Series”)~~party.

The Partnership’s ~~general~~began ~~partner is Ceres Managed Futures LLC (“Ceres” or~~ the ~~“General~~year ~~Partner”).~~at ~~The~~a ~~non-clearing~~net ~~commodity~~asset ~~broker~~value isper ~~Morgan~~unit ~~Stanley~~of ~~Smith~~limited ~~Barney~~partnership ~~LLC~~interest (“~~MSSB”). The clearing commodity brokers are Morgan Stanley & Co. LLC~~ Unit(~~“MS&Co.”~~s) ~~(formerly, Morgan Stanley & Co. Incorporated) and Morgan Stanley & Co. International plc (“MSIP~~”). ~~MS&Co. also acts as the counterparty on all trading~~ of ~~foreign currency forward contracts~~$14.83 ~~Morgan~~and ~~Stanley~~returned ~~Capital Group Inc.~~ (~~“MSCG”~~5.2)% ~~acts~~to ~~as the counterparty on all trading of options on foreign currency forward contracts~~$14.06 ~~MSIP~~per ~~serves~~Unit ~~as the commodity broker for trades~~ on ~~the~~December ~~London~~31, ~~Metal Exchange~~2012. For ~~Ceres is~~ a ~~wholly-owned~~more ~~subsidiary~~detailed description of ~~Morgan~~the ~~Stanley~~Partnership's ~~Smith Barney~~business, ~~Holdings~~see ~~LLC~~subparagraph (~~“MSSBH”~~c). ~~MSSBH is majority-owned~~

- 24 -

~~Table~~(b) Financial Information about Segments. For financial information reporting purposes, the Partnership is deemed to engage in one industry segment, the speculative trading of ~~Contents~~futures, forwards and options on such contracts. The relevant financial information is presented in Items 6 and 8.

~~indirectly~~(c) Narrative byDescription ~~Morgan~~of ~~Stanley and minority-owned indirectly by Citigroup Inc~~Business. The ~~(“Citigroup”).~~Partnership ~~MSSB~~ is in the ~~principal~~business ~~subsidiary~~ of ~~MSSBH.~~speculative ~~MS&Co.~~trading of futures, ~~MSIP~~forwards, and ~~MSCG~~options ~~are~~on ~~wholly-owned subsidiaries~~such ofcontracts ~~Morgan~~pursuant ~~Stanley.~~to ~~The~~ trading ~~advisors~~instructions toprovided by the ~~Partnership~~Trading ~~are SSARIS~~ Advisors,. See ~~LLC~~Items 1(~~“SSARIS”~~a), ~~Altis~~and ~~Partners~~ (~~Jersey~~b) ~~Limited~~above ~~(“Altis”),~~for ~~and~~a ~~C-View~~complete ~~International~~description ~~Limited~~of the Partnership’s business. The information requested in Section 101(~~“C-View”~~c)(i) through (~~each~~xiii) ~~individually,~~of ~~a “Trading~~Regulation ~~Advisor”,~~S-K oris ~~collectively,~~not ~~the~~applicable ~~“Trading~~to ~~Advisors”)~~the Partnership. Additionally, Athe ~~description~~Partnership ofdoes ~~the~~not ~~trading~~have ~~activities~~any employees. The directors and ~~focus~~officers of ~~each~~the ~~Trading~~General ~~Advisor~~Partner ~~begins~~are onlisted ~~page~~in 38Part ~~under~~III. “Item 710. ~~Management’s~~Directors, ~~Discussion~~Executive ~~and~~Officers ~~Analysis of Financial Condition~~ and ~~Results~~Corporate ~~of Operations~~Governance.”

~~Effective~~(d) Financial ~~May 31,~~Information ~~2011,~~about ~~Morgan~~Geographic ~~Stanley &~~Areas. The CoPartnership has not engaged in any operations in non-U. ~~Incorporated~~S. ~~changed~~countries; ~~its~~however, ~~name~~the toPartnership ~~Morgan~~(through ~~Stanley &~~the Cocommodity brokers) enters into forward contract transactions where non-U.S. ~~LLC~~banks are the contracting party and trades futures, forwards and options on such contracts on non-U.S. exchanges.

~~The General Partner, on behalf of the Partnership, has entered into a management agreement with each Trading Advisor~~ (~~each, a “Management Agreement”~~e) Available Information. The ~~Each Management Agreement provides that the Trading Advisor has sole discretion in determining the investments of the assets of the~~ Partnership ~~allocated~~ tofiles ~~the~~an ~~Trading~~annual ~~Advisor~~report byon ~~the~~Form ~~General~~10-K, ~~Partner.~~quarterly ~~Pursuant~~reports toon ~~each~~Form ~~Management Agreement~~10-Q, ~~the~~current ~~Partnership~~reports ~~pays~~on ~~each~~Form ~~Trading Advisor a flat~~8-~~rate~~K, ~~monthly management fee~~ and anall ~~incentive~~amendments ~~fee.~~to ~~The~~these ~~management~~reports ~~fee~~with ~~for~~ the ~~Partnership~~Securities isand ~~accrued~~Exchange atCommission ~~a rate of 5/48 of 1% per month of net assets allocated to SSARIS on the first day of each month~~ (~~a 1.25% annual rate~~“SEC”)~~, 1/12 of 1~~.~~25% per~~ You ~~month~~may ofread ~~net assets allocated to Altis on the first day of each month (a 1.25% annual rate),~~ and ~~1/6~~copy ~~of 1% per~~any ~~month~~document offiled ~~net~~by ~~assets allocated to C-View on~~ the ~~first~~Partnership ~~day~~at ~~of each month (a 2% annual rate).~~ the

- 35 -

~~Table~~SEC’s ofPublic ~~Contents~~Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for information on the Public Reference Room. The Partnership does not maintain an internet website, however, the Partnership’s SEC filings are available to the public from the EDGAR database on the SEC’s website at “http://www.sec.gov”. The Partnership’s CIK number is 0000925266.

InItem addition, the Partnership pays a monthly incentive fee equal to 15% of the trading profits experienced with respect to the net assets allocated to SSARIS as of the end of each calendar month, and 20% of the trading profits experienced with respect to the net assets allocated to Altis and C-View as of the end of each calendar month1A. RISK Trading profits represent the amount by which profits from futures, forwards, and options trading exceed losses after brokerage and management fees are deducted. For all trading advisors with trading losses, no incentive fee is paid in subsequent months until all such losses are recovered. Cumulative trading losses are adjusted on a pro rata basis for the net amount of each month’s redemptions. FACTORS

~~The~~This ~~current~~section ~~term~~includes some of the ~~Management~~principal ~~Agreement~~risks ~~with~~that ~~SSARIS~~investors will ~~expire~~face ~~on November 30, 2012 and will renew annually unless terminated by the General Partner or the Trading Advisor. The current term of the Management Agreement~~ with ~~C-View~~an ~~will~~investment ~~expire~~in ~~on December 31, 2012 and will renew annually unless terminated by~~ the ~~General Partner or the Trading Advisor~~Partnership. The current term of the Management Agreement with Altis will expire on October 9, 2012 and will renew annually unless terminated by the General Partner or the Trading Advisor. In general, each Management Agreement may be terminated upon notice by either party.

~~The~~THE ~~Partnership~~UNITS ~~began~~IN ~~the~~THE ~~year~~PARTNERSHIP atARE aSPECULATIVE ~~net~~AND ~~asset~~INVOLVE ~~value~~A ~~per~~HIGH ~~unit~~DEGREE ofOF ~~limited partnership interest (“Unit(s)”) of $17~~RISK.12 THEY ~~and~~ARE ~~returned (13.4)%~~SUITABLE toONLY ~~$14.83~~FOR ~~per~~PERSONS ~~Unit~~WHO onCAN ~~December 31,~~AFFORD ~~2011.~~TO ~~For~~LOSE aTHEIR ~~more~~ENTIRE ~~detailed description of the Partnership's business, see subparagraph (c)~~INVESTMENT.

-Risks 4Relating - to the Partnership and the Offering of Units

~~Table~~Possible Consequences of ~~Contents~~Using Multiple Trading Advisors. Each Trading Advisor makes trading decisions independent of the other Trading Advisors for the Partnership. Thus, it is possible that the Partnership could hold opposite positions in the same or similar futures, forwards, and options, thereby offsetting any potential for profit from these positions.

~~(b)~~You ~~Financial~~Should ~~Information~~Not ~~about~~Rely ~~Segments.~~on ~~For~~Past ~~financial~~Performance ~~information~~of ~~reporting purposes,~~ the ~~Partnership~~General isPartner ~~deemed~~or ~~to engage in one industry segment,~~ the ~~speculative~~Trading ~~trading~~Advisors ofIn ~~futures,~~Deciding ~~forwards~~To ~~and~~Purchase ~~options on such contracts~~Units. The ~~relevant~~past ~~financial~~investment ~~information~~performance isof ~~presented~~other ~~in Items 6 and 8.~~ entities

(c) Narrative Description of Business. The Partnership is in the business of speculative trading of futures, forwards, and options on such contracts pursuant to trading instructions provided by the Trading Advisors. See Item 1(a) and (b) above for a complete description of the Partnership’s business. The information requested in Section 101(c)(i) through (xiii) of Regulation S-K is6 not applicable to the Partnership. Additionally, the Partnership does not have any employees. The directors and officers of the General Partner are listed in Part III “Item 10. Directors, Executive Officers and Corporate Governance”. -

~~(d)~~managed ~~Financial~~by ~~Information~~the ~~about~~General ~~Geographic~~Partner ~~Areas.~~and ~~The~~the ~~Partnership~~Trading ~~has~~Advisors is not ~~engaged in~~necessarily ~~any~~indicative ~~operations~~of inthe ~~non-U~~Partnership’s future results.S. ~~countries;~~No ~~however,~~assurance ~~the~~can ~~Partnership~~be ~~(through~~given that the ~~commodity~~General ~~brokers)~~Partner ~~enters~~will ~~into~~succeed ~~forward~~in ~~contract~~meeting ~~transactions~~the ~~where~~investment ~~non-U.S.~~objectives ~~banks~~of ~~are~~ the ~~contracting~~Partnership. ~~party~~You ~~and~~may ~~trades~~lose ~~futures,~~all ~~forwards~~or ~~and~~substantially ~~options~~all onof ~~such~~your ~~contracts~~investment ~~on non-U.S.~~in ~~exchanges.~~the Partnership.

~~(e) Available Information.~~ The ~~Partnership~~General ~~files~~Partner anbelieves ~~annual~~that ~~report~~past onperformance ~~Form~~of ~~10-K,~~the ~~quarterly~~Trading ~~reports on~~Advisors ~~Form~~may ~~10-Q,~~be ~~current~~of ~~reports~~interest onto ~~Form 8-K~~investors, ~~and~~but ~~all~~encourages ~~amendments~~you to ~~these~~look ~~reports~~at ~~with~~such ~~the~~information ~~Securities~~as ~~and~~an ~~Exchange~~example ~~Commission~~of ~~(“SEC”). You may read and copy any document filed by~~ the ~~Partnership at the~~ respective

-objectives 5of - the General Partner and Trading Advisors rather than as any indication that the Partnership’s objectives will, in fact, be achieved.

~~Table~~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 ~~Contents~~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.

~~SEC’s~~Incentive ~~Public~~Fees ~~Reference~~May ~~Room~~be atPaid ~~100~~by Fthe ~~Street,~~Partnership ~~N.E.,~~Even ~~Washington,~~Though ~~D.C.~~the ~~20549.~~Partnership ~~Please~~Sustains ~~call~~Trading ~~the~~Losses. ~~SEC~~The atPartnership ~~1-800-SEC-0330~~pays ~~for~~each ~~information~~Trading onAdvisor ~~the~~an ~~Public~~incentive ~~Reference~~fee ~~Room.~~based ~~The~~upon ~~Partnership~~the ~~does~~new ~~not maintain~~trading anprofits ~~internet~~it ~~website,~~generates ~~however,~~for the Partnership’s. ~~SEC~~These ~~filings~~new ~~are~~trading ~~available~~profits toinclude ~~the~~unrealized ~~public~~appreciation ~~from~~on ~~the~~open ~~EDGAR~~positions. ~~database~~Accordingly, onit ~~the~~is ~~SEC’s~~possible ~~website~~that atthe ~~“http://www.sec.gov”. The~~ Partnership’s ~~CIK~~will ~~number~~pay isan ~~0000925266.~~ incentive

~~Item 1A.~~- ~~RISK~~7 ~~FACTORS~~ -

~~The~~fee ~~following~~on ~~risk~~new ~~factors~~trading ~~contain~~profits ~~forward-looking~~that ~~statements~~do ~~within~~not ~~the~~become ~~meaning~~realized. ofAlso, ~~the~~each ~~safe~~Trading ~~harbor~~Advisor ~~from~~will ~~civil~~retain ~~liability~~all ~~provided~~incentive ~~for~~fees ~~such~~paid ~~statements~~to byit, ~~the~~even ~~Private~~if ~~Securities~~it ~~Litigation~~incurs ~~Reform~~a ~~Act~~subsequent ~~of 1995~~loss ~~(set~~after ~~forth~~payment ~~in Section 27A~~ of ~~the~~an ~~Securities~~incentive ~~Act~~fee. ofDue ~~1933~~to ~~and~~the ~~Section 21E~~fact ofthat ~~the~~incentive ~~Securities~~fees ~~Exchange~~are ~~Act~~paid ofmonthly, ~~1934).~~it ~~All~~is ~~quantitative~~possible ~~disclosures~~that inan ~~“Quantifying~~incentive ~~the~~fee ~~Partnership’s~~may ~~Trading~~be ~~Value~~paid atto ~~Risk”~~a inTrading ~~Item 7A. “Quantitative~~Advisor ~~and~~during ~~Qualitative~~a ~~Disclosures~~year ~~About~~in ~~Market~~which ~~Risk”~~the ~~are~~assets ~~deemed~~allocated to besuch ~~forward-looking~~Trading ~~statements~~Advisor ~~for~~suffer ~~purposes~~a ofloss ~~the safe harbor, except~~ for ~~statements~~the ~~of historical fact~~year. ~~The~~Because ~~qualitative~~each ~~disclosures,~~Trading ~~except~~Advisor ~~for (A) those~~receives ~~disclosures~~an ~~that~~incentive ~~are~~fee ~~statements~~based ofon ~~historical fact and (B)~~ the ~~descriptions~~new oftrading ~~how~~profits, the ~~Partnership~~Trading ~~manages~~Advisors ~~its~~may ~~primary~~have ~~market~~an ~~risk~~incentive ~~exposure,~~to inmake ~~the~~investments ~~“Qualitative~~that ~~Disclosure~~are ~~Regarding~~riskier ~~Primary~~than ~~Trading~~would ~~Risk~~be ~~Exposures”~~the case in ~~Item 7A.~~ ~~“Quantitative~~the ~~and~~absence ~~Qualitative~~of ~~Disclosures~~such ~~About~~an ~~Market~~incentive ~~Risk”~~fee ~~are~~being ~~deemed~~paid to bethe ~~forward-looking~~Trading ~~statements~~Advisors ~~for~~based ~~purposes~~on ofnew ~~the~~trading ~~safe harbor~~profits.

~~Current~~Restricted ~~limited~~Investment ~~partners~~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 ~~are~~having ~~advised~~sufficient ~~that~~assets ~~effective~~to ~~December 1,~~pay ~~2008~~its liabilities on the redemption date, and (b) the General Partner’s noreceipt ~~longer~~of ~~accepts~~your ~~any~~Request ~~subscriptions~~ for ~~investments~~Redemption in such manner as determined by the ~~Partnership~~General orPartner ~~any~~no ~~exchanges~~later ~~in from~~than ~~other~~3:00 ~~Spectrum~~p.m., ~~Series~~New ~~partnerships~~York ~~for~~City ~~Units~~time, on the third Business Day before the end of the ~~Partnership~~month. ~~Current~~The ~~limited~~General ~~partners~~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 ~~able~~classified toas ~~redeem~~a ~~Units~~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

- 68 -

~~Table~~would result in the termination of ~~Contents~~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.

General Partner Redemptions. The ~~Partnership~~General Partner is inrequired to maintain a capital contribution at least equal to the ~~business~~greater of: ~~speculative~~(a) ~~trading~~1% of ~~futures,~~aggregate ~~forwards~~capital ~~and~~contributions ~~options on~~to ~~such~~the ~~contracts.~~Partnership ~~For~~(including athe ~~detailed~~General ~~description~~Partner’s ofcontribution) ~~the~~and ~~risks~~(b) ~~that~~$25,000. The General Partner may ~~affect~~otherwise ~~the~~redeem ~~business~~any portion of its investment in the Partnership orat any time without notice to the ~~limited~~Limited ~~partnership~~Partners. ~~interests~~For ~~offered~~any bysuch redemption, the ~~Partnership,~~General ~~see~~Partner will redeem its Units at the ~~discussion~~end of the ~~risk~~month ~~factors~~in the same manner as ~~set~~any ~~forth~~Limited inPartner ~~Item 7~~would follow to redeem Units. ~~“Management’s~~ ~~Discussion~~Additionally, ~~and~~the ~~Analysis~~General ofPartner ~~Financial~~has ~~Condition~~the ~~and~~right ~~Results~~to ofredeem ~~Operations”~~Units ~~and~~it ~~Item 7A.~~holds ~~“Quantitative~~in ~~and~~the ~~Qualitative~~event ~~Disclosures~~redemptions ~~About~~for ~~Market~~Limited ~~Risk”.~~Partners are suspended.

~~Item 1B.~~The ~~UNRESOLVED~~Partnership’s ~~STAFF~~Structure ~~COMMENTS~~Has Conflicts of Interest.

~~Not~~· ~~applicable~~The General Partner, Morgan Stanley Wealth Management, 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.

~~Item 2~~· MS&Co. ~~PROPERTIES~~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~~- ~~Partnership’s~~9 ~~executive and administrative offices are located within the offices of MS&Co. The MS&Co. offices utilized by the Partnership are located at 522 Fifth Avenue, 14th Floor, New York, NY 10036.~~ -

~~Item 3~~· The Trading Advisors, MS&Co., ~~LEGAL PROCEEDINGS~~Morgan Stanley Wealth Management, 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.

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.

~~The~~An ~~Partnership~~Investment isin ~~not~~Units ~~engaged~~May inNot ~~any~~Diversify ~~legal~~an orOverall ~~arbitration~~Portfolio. ~~proceedings~~Because futures, forwards and nooptions ~~legal~~have orhistorically ~~arbitration~~performed ~~proceedings~~independently ~~are~~of ~~known~~traditional toinvestments bein ~~pending~~equities orand ~~threatened~~bonds, bythe orGeneral ~~against~~Partner ~~the~~believes ~~Partnership.~~that ~~During~~managed ~~the~~futures ~~five~~funds ~~years preceding~~like the ~~date~~Partnership can diversify a traditional portfolio of ~~this~~equities ~~Memorandum~~and bonds. However, ~~there~~the ~~have~~General ~~been~~Partner ~~(other~~cannot ~~than~~assure asyou ~~described~~that ~~below)~~the noPartnership ~~administrative,~~will ~~civil~~perform orwith ~~criminal~~a ~~actions~~significant ~~pending,~~degree onof ~~appeal~~non- or ~~concluded~~low-correlation ~~against~~to ~~Morgan~~your ~~Stanley,~~other ~~Morgan~~investments ~~Stanley~~in ~~Smith~~the ~~Barney,~~future. ~~the~~You ~~General~~may ~~Partner, MS &~~lose ~~Co.,~~your ~~MSIP,~~entire ~~Morgan~~investment ~~Stanley~~in the Partnership.

-The 7Partnership - 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

~~Table~~- of10 ~~Contents~~-

~~Dean~~protections ~~Witter,~~afforded ~~Inc.~~by ~~(“MSDW”),~~the ~~MSCG~~Investment orCompany ~~any~~Act ~~of their respective affiliates or principals~~ (which, ~~the~~among ~~General~~other ~~Partner~~matters, ~~believes~~requires ~~would~~investment becompanies ~~material~~ to anhave ~~investor’s~~a ~~decision~~majority toof ~~invest~~disinterested indirectors ~~the Partnership.~~and ~~Unless~~regulates the ~~context~~relationship ~~otherwise~~between ~~requires, for purposes of this section,~~ the ~~terms~~advisor ~~the “Company,” “we,” “us”~~ and ~~“our”~~the ~~mean~~investment ~~Morgan Stanley and its consolidated subsidiaries~~company).

InThe ~~addition~~Federal toReserve ~~the~~Board’s ~~matters~~Regulation ~~described~~of ~~below,~~Morgan inStanley ~~the~~Could ~~normal~~Affect ~~course~~the Activities of ~~business,~~the Partnership. As a financial holding company (“FHC”) under the ~~Company~~Bank ~~has~~Holding ~~been~~Company ~~named~~Act, ~~from~~Morgan ~~time~~Stanley and its affiliates are subject to ~~time~~the comprehensive, asconsolidated ~~a defendant~~supervision inand ~~various~~regulation ~~legal~~of ~~actions,~~the ~~including~~Board ~~arbitrations,~~of ~~class~~Governors ~~actions~~of ~~and~~the ~~other~~Federal ~~litigation,~~Reserve ~~arising~~System (“Federal Reserve”). A significant focus of this regulatory framework is the operation of Morgan Stanley and its subsidiaries in ~~connection~~a safe and sound manner, with ~~its~~sufficient ~~activities~~capital, earnings and liquidity that Morgan Stanley may serve as a ~~global~~source ~~diversified~~of financial ~~services~~and ~~institution~~managerial strength to Morgan Stanley Bank, N.A. ~~Certain~~and ofMorgan Stanley Private Bank, National Association (the ~~actual~~“Banks”). orThese ~~threatened~~Banks ~~legal~~must ~~actions include~~remain ~~claims~~well ~~for~~capitalized ~~substantial~~and ~~compensatory~~well managed if Morgan Stanley is to maintain its FHC status and~~/or~~ ~~punitive~~continue ~~damages~~to orengage ~~claims~~in ~~for~~the ~~indeterminate~~widest ~~amounts~~range of ~~damages~~permissible financial activities. In ~~some~~addition, ~~cases~~the general exercise by the Federal Reserve of its regulatory, supervisory and enforcement authority with respect to Morgan Stanley and certain provisions of the ~~entities~~Dodd-Frank ~~that~~Wall ~~would~~Street ~~otherwise~~Reform beand Consumer Protection Act (the ~~primary~~“Dodd-Frank ~~defendants~~Act” or the “Act”) could result in ~~such~~changes ~~cases~~to ~~are~~Morgan ~~bankrupt~~Stanley’s business practices or inthe ~~financial~~scope ~~distress~~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 Company is also involved, from time to time, in other reviews, investigations and proceedings (both formal and informal) by governmental and self~~-~~regulatory~~ ~~agencies~~11 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~~enactment ~~contests~~of ~~liability~~the ~~and/or~~Dodd-Frank Act will result in enhanced regulation by the ~~amount~~Federal ofReserve ~~damages~~and, aswith ~~appropriate~~respect to the Banks, may result in ~~each~~enhanced ~~pending~~regulation ~~matter~~by the Office of the Comptroller of the Currency (“OCC”). ~~Where available~~The ~~information~~Act ~~indicates~~will require that, itin isorder ~~probable~~to amaintain ~~liability~~FHC ~~had~~status, ~~been~~Morgan ~~incurred~~Stanley at(as well as the ~~date~~Banks) ofbe well capitalized and well managed, as those terms are defined by the ~~consolidated~~Federal ~~financial~~Reserve. ~~statements~~The ~~and~~Dodd-Frank Act also grants the ~~Company~~Federal ~~can~~Reserve ~~reasonably~~greater ~~estimate~~regulatory authority over the ~~amount~~subsidiaries of ~~that~~a ~~loss~~bank holding company. Additionally, ~~the~~because ~~Company~~it ~~accrues~~is ~~the~~a ~~estimated~~bank ~~loss~~holding company with more than $50 billion in consolidated assets, Morgan Stanley is subject to enhanced supervision by ~~a charge~~and more stringent prudential standards to ~~income~~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.

-The 8Units - are not being offered by the Banks, and as such: (1) are not Federal Deposit Insurance Corporation (“FDIC”) insured, (2) are not deposits or other obligations of the Banks, (3) are not guaranteed by the Banks, and (4) involve investment risk, including possible loss of principal.

~~Table~~Assets Held in Accounts at U.S. Banks May Not Be Fully Insured. The assets of ~~Contents~~the Partnership that are deposited with commodity brokers or their affiliates may be placed in deposit accounts at U.S. banks. The 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

In- ~~many~~12 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~~would ~~the~~be ~~last~~able ~~several~~to ~~years,~~reclaim ~~the~~cash ~~level of litigation and investigatory activity focused on residential mortgage and credit crisis related matters has increased materially~~ in the ~~financial~~deposit ~~services~~accounts ~~industry.~~above ~~As a result~~$250, 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 material000.

-Risks 9Relating - to Futures Interests Trading and the Futures Interests Markets

~~Table~~Futures Interests Trading is Speculative and Volatile. The rapid fluctuations in the market prices of ~~Contents~~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.

~~Effective~~The onPartnership’s orFutures ~~about~~Interests ~~April 1,~~Trading ~~2007~~is ~~MSDW~~Highly ~~was~~Leveraged. ~~merged~~Trading ~~into~~Advisors ~~MS &~~may Couse substantial leverage in trading the Partnership’s assets. Trading futures, forwards, and options involves substantial leverage, which ~~has assumed~~could ~~all~~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 ~~responsibilities~~value of ~~MSDW.~~the ~~For~~contract ~~purposes~~purchased ofor ~~clarity~~sold), ~~however,~~an ~~MSDW’s~~extremely ~~litigation~~high ~~disclosure~~degree ~~will~~of beleverage ~~retained~~is ~~and~~typical ~~listed~~of ~~separately~~a futures interests trading account. As a result, a relatively small price movement in ~~relevant~~futures, ~~part~~forwards, ~~until~~and options may result in immediate and substantial losses to the ~~fifth~~investor. ~~anniversary~~For example, if 10% of the ~~date~~face value of ~~each~~a ~~specific~~contract ~~disclosure~~is ~~item~~deposited as margin for that contract, a 10% decrease in the ~~MSDW~~value ~~sub-section~~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.

~~Morgan~~- ~~Stanley~~13 ~~DW Inc.~~ -

OnThe ~~September 27,~~leverage ~~2007,~~employed ~~FINRA announced that MS & Co., on behalf of itself and as successor to MSDW, entered into a Letter of Acceptance, Waiver and Consent to resolve charges filed~~ by ~~FINRA on December 19, 2006. In~~ the ~~Letter~~Trading ofAdvisors Acceptance, Waiver and Consent, FINRA found that, among other things, MS & Co. provided inaccurate information regarding the existence of pre-September 11, 2001 emails and failed to provide such emails to arbitration claimants and regulators in ~~response~~their totrading ~~discovery~~can ~~obligations~~vary ~~and~~substantially ~~regulatory~~from ~~inquiries,~~month ~~failed adequately~~ to ~~preserve~~month. ~~books~~This ~~and records~~leverage, ~~and~~expressed ~~failed~~as tothe ~~establish~~underlying ~~and~~value maintain systems and written procedures reasonably designed to preserve required records and to ensure that it conducted adequate searches in response to regulatory inquiries and discovery requests. The Letter of ~~Acceptance,~~the ~~Waiver~~Partnership’s ~~and~~positions ~~Consent~~compared ~~also included findings that MS & Co. failed~~ to ~~provide~~ ~~arbitration~~the ~~claimants~~average ~~with~~net ~~updates~~assets ~~to a supervisory manual when called for in discovery. FINRA found that MS & Co. violated Section 17(a)~~ of the ~~Exchange Act and Rule 17a-4 thereunder~~Partnership, ~~FINRA~~is ~~Conduct~~anticipated ~~Rules~~to ~~2110,~~range ~~3010 (a) and~~from ~~(b) and~~two ~~3110,~~times ~~FINRA~~the ~~Procedural~~Partnership’s ~~Rule~~net ~~8210~~assets ~~and~~to ~~Interpretative~~ten ~~Material~~times ~~10100 under~~ the ~~FINRA~~Partnership’s ~~Code~~net ~~of Arbitration Procedure~~assets. InUnder ~~the~~certain ~~settlement~~conditions, ~~MS &~~however, ~~Co. neither admitted nor denied these findings. The settlement established a $9.5 million fund for~~ the ~~benefit~~Partnership’s ofleverage ~~potentially~~could ~~affected~~exceed ~~arbitration~~(or ~~claimants to~~ be ~~administered~~less bythan) asuch ~~third party at the expense of MS & Co~~range. ~~In addition,~~

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 10market 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 many long- term futures strategies where volatility does not have as great an effect on the price of a futures contract.

~~Table~~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 ~~Contents~~trades at prices outside of the limit, and,

~~MS &~~- ~~Co.~~14 was censured and agreed to pay a $3 million regulatory fine and to retain an independent consultant to review its procedures for complying with discovery requirements in arbitration proceedings relating to MS & Co.’s retail brokerage operations. -

Onfrom ~~October 10,~~time ~~2007, MS & Co., on behalf of itself and as successor~~ to ~~MSDW~~time, ~~became~~ the ~~subject~~CFTC ofor ~~an Order Instituting Administrative And Cease-And-Desist Proceedings by~~ the ~~SEC.~~exchanges ~~The~~may ~~Order~~suspend ~~found~~trading ~~that from as early as 2000 until 2006, MS & Co. failed to provide to its customers accurate and complete written trade confirmations for certain fixed income securities~~ in ~~violation~~market ofdisruption ~~Rule 10b-10 under the Exchange Act, Section 15B(c)(1) of the Exchange Act and Rule G-15 of the Municipal Securities Rulemaking Board (MSRB)~~circumstances. ~~The~~In ~~Order~~these ~~censured~~cases ~~MS & Co., ordered~~ it tois ~~cease~~possible ~~and~~that ~~desist from committing or causing any violations and any future violations of Rule 10b-10 under~~ the ~~Exchange~~Partnership ~~Act,~~could ~~Section 15B(c)(1)~~be ofrequired ~~the Exchange Act, and MSRB Rule G-15, ordered MS & Co.~~ to ~~pay~~maintain a ~~$7.5~~losing ~~million~~position ~~penalty,~~that ~~and~~it tootherwise ~~retain~~would anexecute ~~independent consultant to review MS & Co.’s policies~~ and ~~procedures.~~incur ~~MS &~~significant ~~Co.~~losses ~~consented to the issuance of the Order without admitting~~ or ~~denying~~be ~~any~~unable ofto ~~the~~establish ~~SEC’s~~a ~~findings,~~position ~~except~~and asmiss toa ~~the~~profit ~~SEC’s jurisdiction over the matter~~opportunity.

Trading on Foreign Exchanges Presents Greater Risks to the Partnership than Trading on U.S. Exchanges. The ~~Company~~ 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 regulated by the Commodity Futures Trading Commission (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.

~~Residential~~Positions ~~Mortgage~~on ~~and~~foreign ~~Credit~~exchanges ~~Crisis~~also ~~Related~~are ~~Matters~~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.

Regulatory and Governmental Matters. The Company is responding to subpoenas and requests for information from certain regulatory and governmental entities concerning the origination, financing, purchase, securitization and servicing of subprime and non-~~subprime~~ ~~residential~~15 ~~mortgages and related matters such as residential mortgage backed securities (“RMBS”),~~ -

-The 11Unregulated 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 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 as of December 31, 2012 is approximately 40.84%.

~~Table~~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 ~~Contents~~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.

~~collateralized~~- ~~debt~~16 obligations (“CDOs”), structured investment vehicles (“SIVs”) and credit default swaps backed by or referencing mortgage pass through certificates. These matters include, but are not limited to, investigations related to the Company’s due diligence on the loans that it purchased for securitization, the Company’s communications with ratings agencies, the Company’s disclosures to investors, and the Company’s handling of servicing and foreclosure related issues. -

~~Class Actions. Beginning~~Trading inSwaps ~~December~~Creates ~~2007,~~Distinctive ~~several~~Risks. ~~purported~~The ~~class~~Trading ~~action~~Advisors ~~complaints~~may ~~were~~trade ~~filed~~ in ~~the~~certain ~~United States~~swaps. ~~District~~Unlike ~~Court~~futures ~~for~~and ~~the~~options ~~Southern~~on ~~District~~futures ofcontracts ~~New~~and ~~York~~commodities, ~~(the~~swap ~~“SDNY”)~~contracts ~~asserting~~are ~~claims~~currently not generally traded on ~~behalf~~or ofcleared ~~participants in~~by an exchange or clearinghouse. Nevertheless, the ~~Company’s~~Dodd-Frank ~~401(k)~~Act ~~plan~~contemplates that certain swaps will be exchange-traded and ~~employee~~cleared ~~stock~~by ~~ownership~~a ~~plan~~clearinghouse ~~against~~in the ~~Company~~future and ~~other~~the ~~parties,~~CFTC ~~including~~proposed regulations requiring that certain ~~present~~classes ~~and~~of ~~former~~interest ~~directors~~rate and ~~officers,~~credit ~~under~~default ~~the~~swaps ~~Employee~~be ~~Retirement~~cleared ~~Income~~in ~~Security~~the ~~Act~~future. As ofwith ~~1974~~any ~~(“ERISA”).~~forward ~~In February~~foreign ~~2008~~currency or spot contract, until such time as these ~~actions~~transactions ~~were~~are ~~consolidated~~cleared inor aguaranteed ~~single~~by ~~proceeding~~an exchange, ~~which~~the isPartnership ~~styled~~will Inbe resubject ~~Morgan~~to ~~Stanley~~the ~~ERISA~~risk ~~Litigation~~of counterparty default on its swaps. Because ~~The~~swaps ~~consolidated~~do ~~complaint~~not ~~relates~~generally ininvolve ~~large~~the ~~part~~delivery of underlying assets or principal, the loss would be calculated by referring to the ~~Company’s~~current ~~subprime~~market ~~and~~value ~~other~~of ~~mortgage~~the ~~related~~contract. One ~~losses, but~~of ~~also~~the ~~includes~~factors ~~allegations~~in ~~regarding~~such calculation may be the ~~Company’s~~net ~~disclosures,~~present ~~internal~~value ~~controls,~~of ~~accounting~~future ~~and~~payments ~~other~~required ~~matters~~by contract. In ~~The~~addition, ~~consolidated~~some ~~complaint~~swap ~~alleges,~~counterparties ~~among~~may ~~other~~require ~~things,~~the ~~that~~Partnership to deposit collateral to support the ~~Company~~Partnership’s ~~common~~obligations ~~stock~~under ~~was~~the swap agreement but may not athemselves ~~prudent~~deposit ~~investment~~collateral. If ~~and that~~the ~~risks~~counterparty ~~associated~~to ~~with~~such ~~its~~a ~~common~~swap ~~stock~~defaults, ~~and~~the ~~its~~Partnership ~~financial~~would ~~condition~~be ~~were~~a ~~not~~general ~~adequately~~unsecured ~~disclosed.~~creditor ~~Plaintiffs~~for ~~are~~any ~~seeking,~~termination ~~among~~amounts ~~other~~owed ~~relief,~~by ~~class~~the ~~certification,~~counterparty ~~unspecified~~as ~~compensatory~~well ~~damages,~~as ~~costs,~~for ~~interest~~any ~~and~~collateral ~~fees.~~deposits Onin ~~December 9, 2009,~~excess of the ~~court~~amounts ~~denied~~owed ~~defendants’~~by ~~motion~~the Partnership to ~~dismiss~~ the ~~consolidated~~counterparty, ~~complaint.~~which would result in losses to the Partnership.

-Swap 12counterparties may hold collateral in U.S. or non- U.S. depositories. Non-U.S. depositories are not subject to U.S. regulation. The Partnership’s assets held in these depositories are subject to the risk that events could occur which would hinder or prevent the availability of these funds for distribution to customers including the Partnership. Such events may include actions by the government of the jurisdiction in which the depository is located including expropriation, taxation, moratoria and political or diplomatic events.

~~Table~~- of17 ~~Contents~~-

OnDeregistration ~~March 16,~~of ~~2011,~~the aCommodity ~~purported~~Pool ~~class~~Operator ~~action,~~or ~~styled~~the ~~Coulter~~Commodity v.Trading ~~Morgan Stanley &~~Advisors CoCould Disrupt Operations. ~~Incorporated~~The etGeneral ~~al.,~~Partner ~~was~~is ~~filed~~a inregistered ~~the~~commodity ~~SDNY~~pool ~~asserting~~operator ~~claims~~and onregistered ~~behalf~~commodity oftrading ~~participants~~advisor inand ~~the~~each ~~Company’s~~Trading ~~401(k)~~Advisor ~~plan~~is ~~and~~a ~~employee~~registered ~~stock~~commodity ~~ownership~~trading ~~plan~~advisor. ~~against~~If the ~~Company~~CFTC ~~and~~were ~~certain~~to ~~current~~terminate, ~~and~~suspend, ~~former~~revoke ~~officers~~or ~~and directors~~not ~~for~~renew ~~breach~~the registration of ~~fiduciary~~the ~~duties~~General ~~under~~Partner, ~~ERISA~~the General Partner would withdraw as general partner of the Partnership. The ~~complaint~~Limited ~~alleges,~~Partners ~~among~~would ~~other~~then ~~things,~~determine ~~that~~whether ~~defendants~~to ~~knew~~select a replacement general partner or ~~should~~to ~~have~~dissolve ~~known~~the ~~that~~Partnership. ~~from~~If ~~January 2,~~the ~~2008~~CFTC were to ~~December 31~~terminate, ~~2008~~suspend, ~~the~~revoke ~~plans’~~or ~~investment~~not inrenew ~~Company~~the ~~stock~~registration ~~was imprudent~~of ~~given~~a ~~the~~Trading ~~extraordinary~~Advisor, ~~risks~~the ~~faced~~General byPartner ~~the~~would ~~Company~~terminate ~~and~~such ~~its~~Trading ~~common~~Advisor’s ~~stock~~advisory ~~during~~agreement ~~that~~with ~~period~~the Partnership. ~~Plaintiffs~~The ~~are~~General ~~seeking,~~Partner ~~among~~could ~~other~~reallocate ~~relief,~~the ~~class~~Partnership’s ~~certification,~~assets ~~unspecified~~managed ~~compensatory~~by ~~damages,~~the ~~costs,~~deregistered ~~interest~~Trading ~~and~~Advisor ~~fees.~~to Onnew ~~July 20,~~trading ~~2011, plaintiffs~~advisor(s) ~~filed~~or anterminate ~~amended~~the ~~complaint~~Partnership. ~~and~~No onaction ~~October 28,~~is ~~2011,~~currently ~~defendants~~pending ~~filed~~or athreatened ~~motion~~against tothe ~~dismiss~~General Partner or any of the ~~amended~~Trading ~~complaint~~Advisors.

OnThe ~~February 12,~~Partnership ~~2008,~~is aSubject ~~plaintiff~~to ~~filed~~Speculative aPosition ~~purported~~Limits. ~~class~~The ~~action,~~CFTC ~~which~~and/or ~~was~~U.S. ~~amended~~exchanges onhave ~~November 24,~~established ~~2008,~~“speculative ~~naming~~position ~~the~~limits” ~~Company and~~on ~~certain~~the ~~present~~maximum ~~and~~net ~~former~~long ~~senior~~or ~~executives~~net asshort ~~defendants~~position, ~~and~~which ~~asserting~~any ~~claims~~person ~~for~~or ~~violations~~group of ~~the~~persons ~~securities~~may ~~laws.~~hold ~~The~~or ~~amended~~control ~~complaint~~in particular futures, ~~which~~options ison ~~styled~~futures ~~Joel~~and ~~Stratte-McClure,~~swaps etthat ~~al.~~perform v.a ~~Morgan Stanley,~~significant etprice aldiscovery function., Most isexchanges ~~currently pending~~also inlimit the ~~SDNY.~~amount ~~Subject~~of tofluctuation ~~certain~~in ~~exclusions,~~commodity ~~the~~futures ~~amended~~contract ~~complaint~~prices ~~asserts claims~~ on ~~behalf of~~ a ~~purported~~single ~~class~~trading ofday. The ~~persons~~trading ~~and~~instructions ~~entities who purchased shares~~ of the ~~Company’s~~Trading ~~common~~Advisors ~~stock~~may ~~during~~have ~~the~~to ~~period~~be ~~June 20~~modified, ~~2007 to December 19, 2007~~ and ~~who~~positions ~~suffered~~held ~~damages~~by asthe aPartnership ~~result~~may ofhave ~~such~~to ~~purchases.~~be ~~The~~liquidated ~~allegations~~ in ~~the~~order ~~amended complaint relate in large part~~ to ~~the~~avoid ~~Company’s~~exceeding ~~subprime~~these ~~and~~limits. Such ~~other~~modification ~~mortgage~~or ~~related~~liquidation ~~losses,~~could ~~but~~adversely ~~also~~affect ~~include allegations regarding~~ the ~~Company’s~~ ~~disclosures,~~operations ~~internal controls, accounting~~ and ~~other~~profitability ~~matters.~~of ~~Plaintiffs~~the ~~are~~Partnership by ~~seeking,~~increasing ~~among~~transaction ~~other~~costs ~~relief,~~to ~~class~~liquidate ~~certification,~~positions ~~unspecified compensatory damages, costs, interest~~ and ~~fees.~~limiting Onpotential ~~April 27,~~profits ~~2009,~~on the ~~Company~~liquidated ~~filed~~ positions.

- 1318 -

~~Table~~In October 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 ~~Contents~~Columbia and remanded to the CFTC for further consideration. It is possible, nevertheless, that these rules may take effect in some form via re-promulgation or a successful appeal by the CFTC of the District Court’s ruling. The vacated rules established position limits on certain futures contracts and any economically equivalent futures, options and swaps. These rules could have an adverse effect on the Trading Advisors and the Partnership.

aThe ~~motion~~Partnership tohas ~~dismiss~~Credit Risk to the ~~amended~~Commodity ~~complaint~~Brokers. OnThe ~~April 4,~~Partnership ~~2011,~~has credit risk because the ~~court~~commodity ~~granted~~brokers ~~defendants’~~act ~~motion~~as tothe ~~dismiss~~futures ~~and~~commission ~~granted~~merchants ~~plaintiffs~~for ~~leave~~futures totransactions ~~file~~or anthe ~~amended~~counterparties ~~complaint~~of OTC transactions, with respect to ~~certain~~ most of ~~their~~the ~~allegations~~Partnership’s assets. OnAs ~~June 9~~such, ~~2011~~in the event that the commodity brokers are unable to perform, ~~plaintiffs~~the ~~filed~~Partnership’s assets are at risk and, in such event, investors may only recover a ~~second~~pro ~~amended~~rata ~~complaint~~share of their investment in ~~response~~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 ~~court~~Partnership’s ~~order~~account ofon ~~April 4,~~a ~~2011~~daily basis. OnThe ~~August 8~~commodity brokers, ~~2011~~as futures commission merchants for the Partnership’s exchange-traded contracts, ~~defendants~~are ~~filed~~required, apursuant ~~motion~~to CFTC regulations, to ~~dismiss~~segregate from their own assets, and for the ~~second~~sole ~~amended~~benefit ~~complaint~~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

On May 7, 2009, the Company was named as a defendant in a purported class action lawsuit brought under Sections 11, 12 and 15 of the Securities Act of 1933, as amended (the “Securities Act”), alleging, among other things, that the registration statements and offering documents related to the offerings of approximately $17 billion of mortgage pass through certificates in 2006 and 2007 contained false and misleading information concerning the pools of residential loans that backed these securitizations. The plaintiffs sought, among other relief, class certification, unspecified compensatory and rescissionary damages, costs, interest and fees. This case, which was consolidated with an earlier lawsuit and is currently styled In re Morgan Stanley Mortgage Pass-~~Through~~ ~~Certificate~~19 Litigation, is pending in the SDNY. On August 17, 2010, the court dismissed the claims brought by the lead plaintiff, but gave a different plaintiff leave to file a second amended complaint. On September 10, 2010, that plaintiff, together with several new plaintiffs, filed a second amended complaint which purported to assert claims against the Company and others on behalf of a class of investors who purchased approximately $4.7 billion of mortgage pass through certificates issued in 2006 by seven trusts collectively containing residential mortgage loans. The second amended complaint asserted claims under Sections 11, 12 and 15 of the Securities Act, and alleged, among other things, that the registration statements and offering documents related to the -

-is 14no - 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.

~~Table~~Risks ofRelating ~~Contents~~to the Trading Advisors

~~offerings~~Since ~~contained false and misleading information concerning~~ the ~~pools~~future performance of residential loans that backed these securitizations. The plaintiffs sought, among other relief, class certification, unspecified compensatory and rescissionary damages, costs, interest and fees. On September 15, 2011, the ~~court~~Trading ~~granted~~Advisors inis ~~part and denied in part the defendants’ motion to dismiss and granted the plaintiffs’ request to file another amended complaint. On September 29~~unpredictable, ~~2011,~~ the ~~defendants~~Trading ~~moved for reconsideration of a portion of the court~~Advisors’s ~~decision~~past ~~partially~~performance ~~denying~~is ~~the~~not ~~motion~~necessarily toindicative ~~dismiss. On September 30, 2011, the plaintiffs filed a third amended complaint purporting to bring claims on behalf~~ of afuture ~~class of investors who purchased approximately $2~~results.~~7 billion of mortgage pass through certificates issued in 2006 by five trusts. The defendants moved to dismiss the third amended complaint on October 17, 2011.~~

~~Beginning~~Reliance inon ~~2007,~~ the ~~Company~~Trading ~~was~~Advisors ~~named~~to asTrade aSuccessfully. ~~defendant~~The inTrading ~~several~~Advisors ~~putative~~are ~~class~~responsible ~~action~~for ~~lawsuits brought~~making ~~under~~all ~~Sections~~futures, 11forwards, and 12options trading decisions on behalf of the ~~Securities~~Partnership. ~~Act,~~The ~~related~~General toPartner ~~its~~has ~~role~~no ascontrol aover ~~member~~the ofspecific trades the ~~syndicates~~Trading ~~that~~Advisors ~~underwrote~~may ~~offerings~~make, ofleverage ~~securities~~used, risks and/or ~~mortgage~~concentrations ~~pass~~assumed ~~through~~or ~~certificates~~whether ~~for~~the ~~certain~~Trading ~~non-Morgan~~Advisors ~~Stanley~~will ~~related~~act ~~entities~~in ~~that~~accordance ~~have~~with ~~been exposed~~the todisclosure ~~subprime~~documents ~~and~~or ~~other~~descriptive ~~mortgage-related~~materials ~~losses.~~furnished ~~The~~by ~~plaintiffs~~them into ~~these~~the ~~actions~~General ~~allege,~~Partner. ~~among~~The ~~other~~General ~~things,~~Partner can provide no assurance that the ~~registration~~trading ~~statements~~program ~~and~~employed ~~offering~~by ~~documents~~the ~~for~~Trading ~~the~~Advisors ~~offerings~~will atbe ~~issue~~successful. ~~contained~~The ~~material~~Trading ~~misstatements~~Advisors, orin ~~omissions related~~turn, toare dependent upon the ~~extent~~services toof ~~which~~a ~~the~~limited ~~issuers~~number ~~were~~of ~~exposed~~persons to ~~subprime~~develop and ~~other~~refine ~~mortgage-related~~their ~~risks~~trading approaches and ~~other~~strategies ~~matters~~ and ~~seek~~execute ~~various~~the ~~forms~~trading transactions. The loss of ~~relief~~the ~~including~~services ~~class~~of ~~certification,~~any ~~unspecified~~of ~~compensatory~~the ~~and~~Trading ~~rescissionary~~Advisors’ ~~damages,~~principals ~~costs~~or key employees, ~~interest~~ ~~and~~or ~~fees.~~the ~~The~~failure ~~Company’s~~of ~~exposure~~those principals or key employees to ~~potential~~function ~~losses~~effectively inas ~~these~~a ~~cases~~team, may behave ~~impacted~~an byadverse ~~various~~effect ~~factors~~on ~~including,~~the ~~among~~Trading ~~other~~Advisors’ ~~things~~ability to manage their trading activities successfully, ~~the~~or ~~financial~~may ~~condition~~cause ofa ~~the~~Trading ~~entities~~Advisor ~~that~~to ~~issued~~cease oroperations ~~sponsored~~entirely. This, in turn, could negatively affect the Partnership’s performance.

- 1520 -

~~Table~~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 ~~Contents~~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

~~securities~~control ~~and mortgage pass through certificates at issue~~of, ~~the~~or ~~principal~~participation ~~amount of the offerings underwritten by the Company~~in, the ~~financial condition of co-defendants and the willingness and ability of the issuers (or their affiliates~~markets) tomay ~~indemnify~~reduce the ~~underwriter~~Trading ~~defendants.~~Advisors’ ~~Some~~ability ~~of these cases, including In Re Washington Mutual, Inc. Securities Litigation, In re: Lehman Brothers Equity/Debt Securities Litigation and In re IndyMac Mortgage-Backed Securities Litigation, relate~~ to ~~issuers~~trade orprofitably ~~sponsors~~in ~~(or~~the ~~their affiliates) that have filed for bankruptcy or have been placed into receivership~~future.

InIncreasing ~~re:~~the ~~Lehman~~Assets ~~Brothers~~Managed ~~Equity/Debt~~by ~~Securities~~the ~~Litigation~~Trading isAdvisors ~~pending~~May inAdversely ~~the~~Affect ~~SDNY~~Their ~~and~~Performance. ~~relates~~The torates ~~several~~of ~~offerings~~return ofachieved ~~debt~~by ~~and~~commodity ~~equity~~trading ~~securities~~advisors ~~issued~~often bydiminish ~~Lehman~~as ~~Brothers~~the ~~Holdings~~assets ~~Inc.~~under ~~during~~their ~~2007 and~~management ~~2008~~increase. ~~The~~This ~~Company~~can ~~underwrote~~occur ~~approximately~~for ~~$232~~many ~~million~~reasons, ofincluding the ~~principal~~inability ~~amount~~ of the ~~offerings~~trading atadvisor ~~issue.~~to Onexecute ~~September 23,~~larger ~~2011,~~position asizes ~~group~~at desired prices and because of ~~underwriter~~the ~~defendants,~~need ~~including~~to adjust the ~~Company,~~trading ~~reached~~advisor’s antrading ~~agreement~~program into ~~principle~~avoid ~~with~~exceeding ~~the~~speculative ~~class plaintiffs~~position tolimits. ~~settle~~These are limits established by the ~~litigation.~~CFTC Onand ~~December 15,~~the ~~2011,~~exchanges on the ~~Court~~number ~~presiding~~of ~~over~~speculative ~~this~~futures ~~action~~and ~~issued~~options ancontracts ~~order~~in ~~preliminarily~~a ~~approving~~commodity ~~the~~that ~~settlement~~one trader may own or control. The ~~settlement~~Trading ~~hearing~~Advisors ishave ~~currently~~not ~~scheduled~~agreed ~~for~~to ~~April 12,~~limit ~~2012.~~the amount of additional assets that they will manage.

~~In re IndyMac Mortgage~~-~~Backed~~ Securities Litigation is pending in the SDNY and relates to offerings of mortgage pass through certificates issued by seven trusts sponsored by affiliates of IndyMac Bancorp during 2006 and 2007. The Company underwrote over $1.4 billion of the principal amount of the offerings originally at issue. On June 21, 2010, the court granted in part and denied in part the underwriter defendants’ motion to dismiss the amended consolidated class action complaint. The Company underwrote approximately $46 million of the principal amount of the offerings at issue following the court’s June 21, 2010 decision. On May 17, 2010, certain putative -

-You 16Will - 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.

~~Table~~The ofTrading ~~Contents~~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.

~~plaintiffs~~Disadvantages ~~filed~~of aReplacing ~~motion~~or toSwitching ~~intervene~~Trading inAdvisors. ~~the~~The ~~litigation~~Trading inAdvisors ~~order~~are required to ~~assert~~recoup ~~claims~~previous ~~related~~trading tolosses ~~additional~~before ~~offerings.~~they ~~The~~can ~~principal~~earn ~~amount~~performance-based ofcompensation. However, the ~~additional~~General ~~offerings~~Partner ~~underwritten~~may byelect ~~the~~to ~~Company~~replace ~~is approximately~~a ~~$1.2~~Trading ~~billion~~Advisor if it has a “loss carry-forward.” OnIn ~~June 21,~~that ~~2011~~case, the ~~Company~~Partnership ~~successfully~~would ~~opposed~~lose the ~~motion~~“free toride” ~~add~~of ~~the~~any ~~additional~~potential ~~plaintiffs~~recoupment asof to the ~~Company~~prior losses. OnIn ~~July 20~~addition, ~~2011~~the ~~and~~new ~~July 21,~~trading ~~2011,~~advisor(s) ~~certain~~would ofearn ~~the~~performance-based ~~additional~~compensation ~~plaintiffs~~on ~~filed~~the ~~appeals~~first ~~in the~~dollars ~~United~~of ~~States~~investment ~~Court~~profits. The effect of ~~Appeals~~the ~~for~~replacement of or the ~~Second~~reallocation ~~Circuit.~~of ~~The~~assets ~~Company~~away isfrom ~~opposing~~a ~~the~~Trading ~~appeals.~~Advisor therefore could be significant.

~~Luther,~~Partnership etPerformance ~~al.~~May ~~v. Countrywide~~Be ~~Financial~~Hindered Corporation, et al., pending in the Superior Court of the State of California, involves claims related to the Company’s role as an underwriter of various residential mortgage backed securities offerings issued by ~~affiliates~~ ofIncreased ~~Countrywide~~Competition ~~Financial~~for ~~Corporation~~Positions. ~~The~~Assets ~~amended~~in ~~complaint~~managed ~~includes~~futures ~~allegations~~have ~~that~~grown ~~the~~from ~~registration~~an ~~statements~~estimated ~~and the offering documents contained false and misleading statements about the residential mortgage loans backing the securities. The Company underwrote approximately~~ $~~6.3~~300 ~~billion~~million ofin ~~the~~1980 principal amount of the offerings at issue. On January 6, 2010, the Court dismissed the case for lack of subject matter jurisdiction. On May 18, 2011, a California court of appeals reversed the dismissal and reinstated the complaint. On December 19, 2011, defendants moved to ~~dismiss~~over ~~the~~$300 complaint. On February 3, 2012, defendants moved to stay the case pending resolution of a securities class action brought by the same plaintiffs, styled Maine State Retirement System v. Countrywide Financial Corporation, et al., in the United States District Court for the Central District of California. billion

- 1722 -

~~Table~~in of2012. ~~Contents~~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.

~~Other~~You ~~Litigation. On~~Will ~~August 25,~~Not ~~2008,~~Have ~~the~~Access ~~Company and two ratings agencies were named as defendants in a purported class action related~~ to ~~securities issued by a SIV called Cheyne Finance (~~the ~~“Cheyne~~Partnership’s ~~SIV”).~~Positions ~~The case is styled Abu Dhabi Commercial Bank, et al. v. Morgan Stanley & Co. Inc., et al.~~ and isMust ~~pending~~Rely inon the ~~SDNY.~~General ~~The~~Partner ~~complaint alleges, among other things, that the ratings assigned~~ to ~~the~~Monitor ~~securities issued by~~ the ~~SIV~~Trading ~~were false and misleading because the ratings did not accurately reflect the risks associated with the subprime RMBS held by the SIV~~Advisors. OnAs ~~September 2,~~a ~~2009,~~Limited ~~the court dismissed all of the claims against the Company except for plaintiffs’ claims for common law fraud. On June 15~~Partner, ~~2010,~~you ~~the~~will ~~court~~not ~~denied~~have ~~plaintiffs’~~access ~~motion for class certification. On July 20, 2010, the court granted plaintiffs leave~~ to ~~replead their aiding and abetting common law fraud claims against~~ the ~~Company,~~Partnership’s ~~and~~trade ~~those claims were added in an amended complaint filed on August 5, 2010~~positions. ~~On December 27~~Consequently, ~~2011,~~you ~~the~~will ~~court~~not ~~permitted~~know ~~plaintiffs~~whether ~~to reinstate their causes of action for negligent misrepresentation and breach of fiduciary duty against~~ the ~~Company.~~Trading ~~The~~Advisors ~~Company~~are ~~moved~~adhering to ~~dismiss these claims on January 10, 2012. On January 5, 2012,~~ the ~~court~~Partnership’s ~~permitted~~trading ~~plaintiffs~~policies ~~to amend their complaint~~ and ~~assert~~must arely ~~negligence claim against the Company. The amended complaint was filed~~ on ~~January 9, 2012 and~~ the ~~Company~~ability ~~moved~~of ~~to dismiss~~ the ~~negligence~~General ~~claim~~Partner ~~on January 17, 2012. On January 23, 2012, the Company moved for summary judgment with respect~~ to ~~the~~monitor ~~fraud~~trading and ~~aiding~~protect ~~and~~your ~~abetting fraud claims~~investment. Plaintiffs have not alleged the amount of their alleged investments, and are seeking, among other relief, unspecified compensatory and punitive damages. There are 15 plaintiffs in this action asserting claims related to approximately $983 million of securities issued by the SIV.

-Taxation ~~18 -~~ Risks

~~Table~~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 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 ~~Contents~~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.

On September 25, 2009, the Company was named as a defendant in a lawsuit styled Citibank, N.A. v. Morgan Stanley & Co. International, PLC, pending in the SDNY. The lawsuit relates to a credit default swap referencing the Capmark VI CDO, which was structured by Citibank, N.A. (“Citi N.A.”). At issue is whether, as part of the swap agreement, Citi N.A. was obligated to obtain the Company’s prior written consent before it exercised its rights to liquidate Capmark upon the occurrence of certain contractually-~~defined~~ ~~credit~~23 events. Citi N.A. is seeking approximately $245 million in compensatory damages plus interest and costs. On May 25, 2011, the court issued an order denying the Company’s motion for summary judgment and granting Citi N.A.’s cross motion for summary judgment. On June 27, 2011, the court entered a final judgment against the Company for approximately $269 million plus post-~~judgment interest, and the Company filed a notice of appeal with the United States Court of Appeals for the Second Circuit, which appeal is now pending.~~

OnThe ~~December 14,~~Partnership’s ~~2009,~~Tax ~~Central~~Returns ~~Mortgage~~Could ~~Company~~be ~~(“CMC”) filed a complaint against the Company, in a matter styled Central Mortgage Company v~~Audited. ~~Morgan~~The ~~Stanley~~IRS ~~Mortgage~~could ~~Capital~~audit ~~Holdings LLC, pending in~~ the ~~Court~~Partnership’s ofU.S. ~~Chancery~~federal ofincome ~~the~~tax ~~State of Delaware~~returns. ~~The~~If ~~complaint~~an ~~alleged~~audit ~~that~~results ~~that~~in ~~Morgan~~an ~~Stanley~~adjustment ~~Mortgage Capital Holdings LLC improperly refused~~ to ~~repurchase~~the ~~certain~~Partnership’s ~~mortgage~~tax ~~loans that CMC~~return, asLimited ~~servicer,~~Partners ~~was~~in ~~required to repurchase from~~ the ~~Federal~~Partnership ~~Home~~could ~~Loan~~be ~~Mortgage~~required ~~Corporation~~to ~~(“Freddie~~file ~~Mac”) and the Federal National Mortgage Association (“Fannie Mae”). On November 4, 2011, CMC filed an~~ amended ~~complaint~~returns ~~adding~~and ~~claims~~pay ~~related~~additional ~~to its purchase of servicing rights in connection with approximately $4~~tax.~~1 billion of residential loans~~

You Will Recognize Short-Term 19Capital 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%.

~~Table~~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 ~~Contents~~an investment in the Partnership.

~~deposited~~Tax ~~into~~Laws ~~RMBS~~Are ~~trusts~~Subject ~~sponsored~~To byChange ~~the~~at ~~Company.~~Any ~~The~~Time, ~~amended~~Including ~~complaint~~Already ~~asserts~~Enacted ~~claims~~Changes ~~for~~Scheduled ~~breach~~to ofTake ~~contract,~~Effect ~~quasi-contract,~~in ~~equitable~~2013. ~~and~~Tax ~~tort~~laws ~~claims~~and court and ~~seeks~~IRS ~~compensatory~~interpretations ~~damages~~thereof ~~and equitable~~are ~~remedies,~~subject ~~including~~to ~~rescission,~~change ~~injunctive~~at ~~relief,~~any ~~damages~~time, ~~restitution~~possibly ~~and~~with ~~disgorgement~~retroactive effect. OnFor ~~January 9~~example, ~~2012,~~various ~~the~~tax ~~Company~~rate ~~moved~~reductions tofor ~~dismiss~~non-corporate ~~the~~taxpayers ~~amended~~enacted ~~complaint.~~in 2001 and 2003 are scheduled to expire for taxable years

On- ~~December 23,~~24 2009, the Federal Home Loan Bank of Seattle filed a complaint against the Company and another defendant in the Superior Court of the State of Washington, styled Federal Home Loan Bank of Seattle v. Morgan Stanley & Co. Inc., et al. An amended complaint was filed on September 28, 2010. The complaint alleges that defendants made untrue statements and material omissions in the sale to plaintiff of certain mortgage pass through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sold to plaintiff by the Company was approximately $233 million. The complaint raises claims under the Washington State Securities Act and seeks, among other things, to rescind the plaintiff’s purchase of such certificates. On October 18, 2010, defendants filed a motion to dismiss the action. By orders dated June 23, 2011 and July 18, 2011, the court denied defendants’ omnibus motion to dismiss plaintiff’s amended complaint and on August 15, 2011, the court denied the Company’s individual motion to dismiss the amended complaint. -

~~On March 15,~~beginning ~~2010,~~after ~~the~~December ~~Federal~~31, ~~Home~~2012. ~~Loan~~Further, ~~Bank~~the ofmaximum ~~San~~ordinary ~~Francisco~~income ~~filed~~rates ~~two~~for ~~complaints~~non-corporate ~~against~~taxpayers ~~the~~are ~~Company~~scheduled ~~and~~to ~~other~~increase ~~defendants~~from ~~in the~~35% ~~Superior~~to ~~Court~~39.6%, ofand the ~~State~~maximum oflong-term ~~California.~~capital ~~These~~gains ~~actions~~rates are ~~styled~~scheduled ~~Federal~~to ~~Home~~increase ~~Loan~~from ~~Bank~~15% ofto ~~San Francisco v~~20%. ~~Credit~~Prospective ~~Suisse~~investors ~~Securities~~are ~~(USA)~~urged ~~LLC,~~to etdiscuss ~~al.,~~ scheduled and ~~Federal~~potential ~~Home~~tax ~~Loan~~law ~~Bank~~changes ofwith ~~San Francisco v.~~their ~~Deutsche~~tax ~~Bank Securities Inc~~advisors. ~~et al.,~~

Non-U.S. 20Investors 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.

~~Table~~Item of1B. UNRESOLVED ~~Contents~~STAFF COMMENTS

~~respectively.~~Not ~~Amended complaints were filed on June 10, 2010~~applicable. The complaints allege that defendants made untrue statements and material omissions in connection with the sale to plaintiff of a number of mortgage pass through certificates backed by securitization trusts containing residential mortgage loans. The amount of certificates allegedly sold to plaintiff by the Company in these cases was approximately $704 million and $276 million, respectively. The complaints raise claims under both the federal securities laws and California law and seek, among other things, to rescind the plaintiff’s purchase of such certificates. On April 18, 2011, defendants in these actions filed an omnibus demurrer and motion to strike the amended complaints. On July 29, 2011 and September 8, 2011, the court presiding over both actions sustained defendants’ demurrers with respect to claims brought under the Securities Act, and overruled defendants’ demurrers with respect to all other claims.

~~On June 10,~~Item ~~2010, the Company was named as a new defendant in a pre-existing purported class action related to securities issued by a SIV called Rhinebridge plc (“Rhinebridge SIV”)~~2. The case is styled King County, Washington, et al. v. IKB Deutsche Industriebank AG, et al. and is pending in the SDNY. The complaint asserts claims for common law fraud and aiding and abetting common law fraud and alleges, among other things, that the ratings assigned to the securities issued by the SIV were false and misleading, including because the ratings did not accurately reflect the risks associated with the subprime RMBS held by the SIV. On July 15, 2010, the Company moved to dismiss the complaint. That motion was denied on October 29, 2010. On December 27, 2011, the court permitted plaintiffs to amend their complaint and assert causes of action for negligence, negligent misrepresentation, and breach of fiduciary duty against the Company. The amended PROPERTIES

-The 21Partnership’s - executive and administrative offices are located within the offices of the General Partner. The General Partner’s offices utilized by the Partnership are located at 522 Fifth Avenue, 14th Floor, New York, NY 10036.

~~Table~~Item of3. LEGAL ~~Contents~~PROCEEDINGS

~~complaint~~On ~~was~~June ~~filed on January 10~~1, ~~2012 and the Company moved to dismiss the negligence~~2011, ~~negligent~~Morgan ~~misrepresentation,~~Stanley ~~and~~& ~~breach of fiduciary duty claims on January 31, 2012~~Co. ~~The~~Incorporated ~~case is~~converted ~~pending~~from ~~before~~a ~~the~~Delaware ~~same~~corporation ~~judge~~to ~~presiding~~a ~~over~~Delaware ~~the~~limited ~~litigation~~liability ~~concerning the Cheyne SIV, described above~~company. As ~~While~~a ~~reserving~~result ~~their~~of ~~ability~~that ~~to act otherwise~~conversion, ~~plaintiffs~~Morgan ~~have~~Stanley ~~indicated~~& ~~that~~Co. ~~they~~Incorporated dois ~~not~~now ~~currently~~named ~~plan to file a motion for class certification~~MS&Co. ~~Plaintiffs~~or ~~have not alleged~~ (the ~~amount of their alleged investments, and are seeking, among other relief, unspecified compensatory and punitive damages~~“Company”).

On- ~~July 9,~~25 2010, Cambridge Place Investment Management Inc. filed a complaint against the Company and other defendants in the Superior Court of the Commonwealth of Massachusetts, styled Cambridge Place Investment Management Inc. v. Morgan Stanley & Co., Inc., et al. The complaint asserts claims on behalf of certain clients of plaintiff’s affiliates and alleges that defendants made untrue statements and material omissions in the sale of a number of mortgage pass through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly issued by the Company or sold to plaintiff’s affiliates’ clients by the Company was approximately $242 million. The complaint raises claims under the Massachusetts Uniform Securities Act and seeks, among other things, to rescind the plaintiff’s purchase of such certificates. On February 11, 2011, Cambridge Place Investment Management Inc. filed a second complaint against the Company and other defendants in the Superior Court of the Commonwealth of Massachusetts also styled Cambridge Place Investment Management Inc. v. Morgan Stanley & Co., Inc. et al. The complaint asserts claims on behalf of clients of plaintiff’s affiliates, and alleges that the defendants made untrue statements and material omissions in selling -

MS&Co. is a wholly-owned, 22indirect subsidiary of Morgan Stanley, a Delaware holding company. Morgan Stanley files periodic reports with the SEC as required by the Securities Exchange Act of 1934, which include current descriptions of material litigation and material proceedings and investigations, if any, by governmental and/or regulatory agencies or self- regulatory organizations concerning Morgan Stanley and its subsidiaries, including MS&Co. As a consolidated subsidiary of Morgan Stanley, MS&Co. does not file its own periodic reports with the SEC that contain descriptions of material litigation, proceedings and investigations. As a result, we refer you to the “Legal Proceedings” section of Morgan Stanley’s SEC 10-K filings for 2012, 2011, 2010, 2009, and 2008.

~~Table~~In addition to the matters described in those filings, in the normal course of ~~Contents~~business, each of Morgan Stanley and MS&Co. 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 legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. Each of Morgan Stanley and MS&Co. is also involved, from time to time, in investigations and proceedings by governmental and/or regulatory agencies or self-regulatory organizations, certain of which may result in adverse judgments, fines or penalties. The number of these investigations and proceedings has increased in recent years with regard to many financial services institutions, including Morgan Stanley and MS&Co.

~~certain~~- ~~mortgage~~26 pass through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly issued or underwritten by the Company or sold to plaintiff’s affiliates’ clients by the Company was approximately $102 million. The complaint raises claims under the Massachusetts Uniform Securities Act and seeks, among other things, to rescind the plaintiff’s purchase of such certificates. On October 14, 2011, plaintiffs filed an amended complaint in each action. On November 22, 2011, defendants filed a motion to dismiss the amended complaints. -

~~On July 15, 2010, The Charles Schwab Corp~~MS&Co. ~~filed~~is a ~~complaint~~Delaware ~~against~~corporation ~~the~~with ~~Company~~its ~~and~~main ~~other~~business ~~defendants~~office ~~in the~~located ~~Superior~~at ~~Court~~1585 ~~of the~~Broadway, ~~State~~New ~~of California~~York, ~~styled~~New ~~The~~York ~~Charles Schwab Corp~~10036. Among v.other ~~BNP~~registrations ~~Paribas~~and ~~Securities Corp.~~memberships, ~~et al~~MS&Co. ~~The~~is ~~complaint~~registered ~~alleges~~as ~~that~~a ~~defendants~~futures ~~made~~commission ~~untrue~~merchant ~~statements~~ and ~~material~~is ~~omissions in the sale to one of plaintiff’s subsidiaries of~~ a ~~number~~ ~~of mortgage~~member ~~pass through certificates backed by securitization trusts containing residential mortgage loans. The total amount~~ of ~~certificates allegedly sold to plaintiff’s subsidiary by~~ the ~~Company~~National ~~was approximately~~Futures ~~$180 million~~Association. The complaint raises claims under both the federal securities laws and California law and seeks, among other things, to rescind the plaintiff’s purchase of such certificates. Plaintiff filed an amended complaint on August 2, 2010. On September 22, 2011, defendants filed demurrers to the amended complaint. On October 13, 2011, plaintiff voluntarily dismissed its claims brought under the Securities Act. On January 27, 2012, the court, in a ruling from the bench, substantially overruled defendants’ demurrers.

-During 23the - preceding five years, the following administrative, civil, or criminal actions pending, on appeal or concluded against MS&Co. or any of its principals are material within the meaning of CFTC Rule 4.24(l)(2) or 4.34(k)(2):

~~Table~~On June 2, 2009, Morgan Stanley executed a final settlement with the Office of ~~Contents~~the New York State Attorney General (“NYAG”) in connection with its investigation relating to the sale of auction-rate securities (“ARS”). Morgan Stanley agreed, among other things to: (1) repurchase at par illiquid ARS that were purchased by certain retail clients prior to February 13, 2008; (2) pay certain retail clients that sold ARS below par the difference between par and the price at which the clients sold the securities; (3) arbitrate, under special procedures, claims for consequential damages by certain retail clients; (4) refund refinancing fees to certain municipal issuers of ARS; and (5) pay a total penalty of $35 million. On August 13, 2008, Morgan Stanley reached an agreement in principle on substantially the same terms with the Office of the Illinois Secretary of State, Securities Department (on behalf of a task force of other states under the auspices of the North American Securities Administrators Association) that would settle their investigations into the same matters. A separate investigation of these matters by the SEC remains ongoing.

On July 15, 2010, China Development Industrial Bank (“CDIB”) filed a complaint against the Company, which is styled China Development Industrial Bank v. Morgan Stanley & Co. Incorporated and is pending in the Supreme Court of the State of New York, New York County. The Complaint relates to a $275 million credit default swap referencing the super senior portion of the STACK 2006-1 ~~CDO.~~27 ~~The complaint asserts claims for common law fraud, fraudulent inducement and fraudulent concealment and alleges that the Company misrepresented the risks of the STACK 2006~~-1 CDO to CDIB, and that the Company knew that the assets backing the CDO were of poor quality when it entered into the credit default swap with CDIB. The complaint seeks compensatory damages related to the approximately $228 million that CDIB alleges it has already lost under the credit default swap, rescission of CDIB’s obligation to pay an additional $12 million, punitive damages, equitable relief, fees and costs. On September 30, 2010, the Company filed a motion to dismiss the complaint. On February 28, 2011, the Court denied the Company’s motion to dismiss the complaint. On March 21, 2011, the Company appealed the order denying its motion to dismiss the complaint. On July 7, 2011, the appellate court affirmed the lower court’s decision denying the Company’s motion to dismiss.

On ~~October 15~~June 5, ~~2010~~ 2012, the ~~Federal~~Company ~~Home~~consented ~~Loan~~to ~~Bank~~and became the subject of ~~Chicago~~an ~~filed~~Order ~~two~~Instituting ~~complaints against~~Proceedings Pursuant to Sections 6(c) and 6(d) of the ~~Company~~Commodity Exchange Act, as amended, Making Findings and ~~other~~Imposing ~~defendants.~~Remedial ~~One~~Sanctions ~~was~~by ~~filed~~the in CFTC to resolve allegations related to the ~~Circuit~~ ~~Court~~failure of a salesperson to comply with exchange rules that prohibit off-exchange futures transactions unless there is an Exchange for Related Position (EFRP). Specifically, the ~~State~~CFTC found that from April 2008 through October 2009, the Company violated Section 4c(a) of ~~Illinois~~the Commodity Exchange Act and isCommission ~~styled~~Regulation ~~Federal~~1.38 ~~Home~~by ~~Loan~~executing, ~~Bank of~~ processing and reporting numerous off-exchange futures trades to the Chicago ~~v. Bank~~ Mercantile Exchange (CME) and Chicago Board of ~~America~~Trade ~~Funding~~(CBOT) ~~Corporation et~~as ~~al.~~EFRPs ~~The~~in violation of CME and CBOT rules because those trades lacked the corresponding and related cash, OTC swap, OTC option, or other ~~was~~OTC ~~filed~~derivative in position. In addition, the ~~Superior~~CFTC ~~Court~~found ofthat the ~~State~~Company violated CFTC Regulation 166.3 by failing to supervise the handling of ~~California~~the trades at issue and isfailing ~~styled~~to ~~Federal~~have ~~Home~~adequate ~~Loan~~policies ~~Bank~~and procedures designed to detect and deter the violations of ~~Chicago~~the vAct and Regulations. ~~Bank~~ Without admitting or denying the underlying allegations and without adjudication of ~~America Securities LLC~~any issue of law or fact, etthe ~~al.~~Company ~~The~~accepted ~~complaints~~and ~~allege~~consented ~~that~~to ~~defendants~~entry ~~made~~of ~~untrue~~findings and the imposition of a cease and desist order, a fine of $5,000,000, and undertakings related to public statements, cooperation and ~~material~~payment ~~omissions~~of the fine. The Company entered into corresponding and related settlements with the CME and CBOT in which the ~~sale~~CME tofound ~~plaintiff~~that ~~of a~~the ~~number~~Company ~~of mortgage~~violated ~~pass~~CME Rules 432.Q and 538 and fined the Company $750,000 and CBOT found that the Company violated CBOT Rules 432.Q and 538 and fined the Company $1,000,000.

- 2428 -

~~Table~~On August 25, 2008, the Company and two ratings agencies were named as defendants in a purported class action related to securities issued by a structured investment vehicle called Cheyne Finance PLC and Cheyne Finance LLC (together, the “Cheyne SIV”). The case is styled Abu Dhabi Commercial Bank, et al. v. Morgan Stanley & Co. Inc., et al. and is pending in the United States District Court for the Southern District of ~~Contents~~New York (“SDNY”). The complaint alleges, among other things, that the ratings assigned to the securities issued by the Cheyne SIV were false and misleading, including because the ratings did not accurately reflect the risks associated with the subprime residential mortgage backed securities held by the Cheyne SIV. The plaintiffs currently assert allegations of aiding and abetting fraud and negligent misrepresentation relating to approximately $852 million of securities issued by the Cheyne SIV. The plaintiffs’ motion for class certification was denied in June 2010. The court denied the Company’s motion for summary judgment on the aiding and abetting fraud claim in August 2012. The Company’s motion for summary judgment on the negligent misrepresentation claim, filed on November 30, 2012, is pending. The court has set a trial date of May 6, 2013. There are currently 14 named plaintiffs in the action claiming damages of approximately $638 million. Plaintiffs are also seeking punitive damages. Based on currently available information, the Company believes that the defendants could incur a loss up to approximately $638 million, plus pre- and post-judgment interest, fees and costs.

~~through~~On ~~certificates~~March 15, ~~backed~~2010, bythe ~~securitization~~Federal ~~trusts~~Home ~~containing~~Loan ~~residential~~Bank ~~mortgage loans. The total amount~~ of ~~certificates~~San ~~allegedly~~Francisco ~~sold~~filed totwo ~~plaintiff~~complaints byagainst the Company ~~in the two actions was approximately $203 million~~ and ~~$75~~other ~~million~~defendants ~~respectively. The complaint filed~~ in ~~Illinois raises claims under~~ ~~Illinois law. The complaint filed in California raises claims under~~ the ~~federal~~Superior ~~securities~~Court ~~laws,~~of ~~Illinois law and California law. Both complaints seek, among other things, to rescind~~ the ~~plaintiff’s~~State ~~purchase~~ of ~~such certificates~~California. OnThese ~~March 24,~~actions ~~2011,~~are ~~the~~styled ~~Court presiding over~~ Federal Home Loan Bank of ~~Chicago v. Bank~~ ~~of America~~San ~~Funding Corporation~~Francisco ~~et al~~v. ~~granted~~Credit ~~plaintiff~~Suisse ~~leave~~Securities to(USA) ~~file an amended complaint. On May 27~~LLC, ~~2011,~~et ~~defendants filed a motion to dismiss the amended complaint, which motion is currently pending~~al. ~~On September 15~~, and ~~2011, plaintiff filed an amended complaint in~~ Federal Home Loan Bank of ~~Chicago~~ San Francisco v. ~~Bank~~ ofDeutsche ~~America~~Bank Securities ~~LLC,~~ Inc. et al. ~~On December 1~~, ~~2011, defendants filed a demurrer to the amended complaint, which demurrer is currently pending.~~

On- ~~April 20,~~29 2011, the Federal Home Loan Bank of Boston filed a complaint against the Company and other defendants in the Superior Court of the Commonwealth of Massachusetts styled Federal Home Loan Bank of Boston v. Ally Financial, Inc. F/K/A GMAC LLC et al. The complaint alleges that defendants made untrue statements and material omissions in the sale to plaintiff of certain mortgage pass through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly issued by the Company or sold to plaintiff by the Company was approximately $550 million. The complaint raises claims under the Massachusetts Uniform Securities Act, the Massachusetts consumer protection act and -

-respectively. 25Amended - complaints were filed on June 10, 2010. The amended complaints allege

~~Table~~that defendants made untrue statements and material omissions in connection with the sale to plaintiff of a ~~Contents~~number of mortgage pass through certificates backed by securitization trusts containing residential mortgage loans. The amount of certificates allegedly sold to plaintiff by the Company in these cases was approximately $704 million and $276 million, respectively. The complaints raise claims under both the federal securities laws and California law and seek, among other things, to rescind the plaintiff’s purchase of such certificates. On July 29, 2011 and September 8, 2011, the court presiding over both actions sustained defendants’ demurrers with respect to claims brought under the Securities Act, and overruled defendants’ demurrers with respect to all other claims. At January 25, 2013, the current unpaid balance of the mortgage pass through certificates at issue in these cases was approximately $365 million, and the certificates had not yet incurred losses. Based on currently available information, the Company believes it could incur a loss up to the difference between the $365 million unpaid balance of these certificates and their fair market value at the time of a judgment against the Company, plus pre- and post-judgment interest, fees and costs. The Company may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

~~common~~On ~~law~~July ~~and seeks~~9, ~~among~~2010 ~~other~~and ~~things~~February 11, to2011, ~~rescind~~Cambridge ~~the~~Place ~~plaintiff’s~~Investment ~~purchase~~Management ofInc. ~~such~~filed ~~certificates.~~two Onseparate ~~May~~complaints ~~26,~~against ~~2011,~~the ~~defendants~~Company ~~removed~~and ~~the~~other ~~case~~defendants to in the ~~United~~Superior ~~States District~~ Court ~~for~~ of the ~~District~~Commonwealth of Massachusetts, ~~and~~both onstyled ~~June~~Cambridge Place Investment Management Inc. v. Morgan Stanley 22& Co., ~~2011~~Inc., et al. The complaints assert claims on behalf of certain clients of plaintiff’s ~~filed~~affiliates aand ~~motion~~alleges tothat ~~remand~~defendants ~~the~~made ~~case~~untrue ~~back~~statements toand ~~state~~material ~~court.~~omissions in

~~On July~~- ~~5, 2011, Allstate~~30 Insurance Company and certain of its affiliated entities filed a complaint against the Company in New York State Supreme Court styled Allstate Insurance Company, et al. v. Morgan Stanley, et al. The complaint alleges that defendants made untrue statements and material omissions in the sale to plaintiff of certain mortgage pass through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly issued and/or sold to plaintiffs by the Company was approximately $104 million. The complaint raises common law claims of fraud, fraudulent inducement, aiding and abetting fraud and negligent misrepresentation and seeks, among other things, compensatory and/or rescissionary damages associated with plaintiffs’ purchases of such certificates. On September 9, 2011, plaintiffs filed an amended complaint. On October 14, 2011, defendants filed a motion to dismiss the amended complaint, which motion is currently pending. -

Onthe ~~July~~sale of ~~18,~~a ~~2011,~~number ~~the~~of mortgage ~~Western~~pass ~~and~~through ~~Southern~~certificates ~~Life~~backed ~~Insurance~~by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly issued by the Company ~~and~~or ~~certain~~sold ~~affiliated~~to ~~companies~~plaintiff’s ~~filed~~affiliates’ ~~a complaint against~~clients by the Company in the two matters was approximately $344 million. The complaints raise claims under the Massachusetts Uniform Securities Act and seek, among other ~~defendants~~things, in to rescind the ~~Court~~plaintiff’s purchase of ~~Common~~such ~~Pleas~~certificates. On inOctober 14, ~~Ohio~~2011, ~~styled~~plaintiffs ~~Western~~filed ~~and~~an ~~Southern~~amended ~~Life~~complaint ~~Insurance~~in ~~Company~~each action. On November 22, et2011, ~~al.~~defendants v.filed ~~Morgan~~a ~~Stanley~~motion ~~Mortgage~~to ~~Capital~~dismiss ~~Inc~~the amended complaints. On March 12, et2012, althe court denied defendants’ motion to dismiss with respect to plaintiff’s standing to bring suit. ~~The~~ ~~complaint~~Defendants ~~alleges~~sought interlocutory appeal from that decision on April 11, 2012. On April 26, 2012, defendants ~~made~~filed ~~untrue~~a ~~statements~~second ~~and~~motion ~~material~~to ~~omissions~~dismiss for failure to state a claim upon which relief can be granted, which the court denied, in substantial part, on October 2, 2012. Based on currently available information, the ~~sale~~Company tobelieves ~~plaintiffs~~it could incur a loss for these actions of ~~certain~~up ~~mortgage~~to ~~pass~~the ~~through~~difference between the as yet undetermined unpaid balance of these certificates ~~backed~~and their fair market value at the time of a judgment against the Company, plus pre- and post-judgment interest, fees and costs. The Company may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

-On 26July 15, 2010, China Development Industrial Bank (“CDIB”) filed a complaint against the Company, which is styled China Development Industrial Bank v. Morgan Stanley & Co. Incorporated et al. and is pending in the Supreme Court of the State of New York, New York County (“Supreme Court of NY, NY County”). The complaint relates to a $275 million credit default swap referencing the super senior portion of the STACK 2006- 1 CDO. The complaint

~~Table~~- of31 ~~Contents~~-

~~securitization~~asserts ~~trusts~~claims ~~containing~~for ~~residential~~common ~~mortgage~~law ~~loans.~~fraud, ~~The~~fraudulent ~~amount~~inducement and fraudulent concealment and alleges that the Company misrepresented the risks of the ~~certificates~~STACK ~~allegedly~~2006-1 ~~sold~~CDO to ~~plaintiffs~~CDIB, byand that the Company ~~was~~knew ~~approximately~~that ~~$153~~the ~~million~~assets backing the CDO were of poor quality when it entered into the credit default swap with CDIB. The complaint ~~raises claims~~seeks compensatory damages related to the approximately $228 million that CDIB alleges it has already lost under the ~~Ohio~~credit ~~Securities~~default ~~Act~~swap, ~~federal~~rescission ~~securities~~of ~~laws~~CDIB’s obligation to pay an additional $12 million, punitive damages, equitable relief, fees and ~~common~~costs. On ~~law~~February 28, 2011, the court presiding over this action denied the Company’s motion to dismiss the complaint and ~~seeks~~on March 21, ~~among~~2011, ~~other~~the ~~things~~Company appealed that order. On July 7, to2011, ~~rescind~~the appellate court affirmed the ~~plaintiffs~~lower court’s ~~purchases~~decision ofdenying ~~such~~the ~~certificates~~motion to dismiss. Based on currently available information, the Company believes it could incur a loss of up to approximately $240 million plus pre- and post-judgment interest, fees and costs.

On ~~September~~October 215, ~~2011~~2010, the Federal ~~Housing~~Home ~~Finance~~Loan ~~Agency~~Bank ~~(“FHFA”),~~of asChicago ~~conservator for Fannie Mae and Freddie Mac,~~ filed 17a ~~complaints against numerous financial services companies, including the Company. A~~ complaint against the Company and other defendants ~~was filed~~ in the Circuit ~~Supreme~~ Court of the State of ~~New~~Illinois ~~York,~~ styled Federal ~~Housing~~Home ~~Finance~~Loan ~~Agency,~~Bank ~~as Conservator~~ of Chicago v. Bank ~~Morgan~~of ~~Stanley~~America Funding Corporation et al. The complaint alleges that defendants made untrue statements and material omissions in ~~connection with~~ the sale to ~~Fannie~~plaintiff ~~Mae~~of a ~~and~~number ~~Freddie Mac~~ of ~~residential~~ mortgage pass through certificates ~~with~~backed ~~an original~~by ~~unpaid~~securitization ~~balance~~trusts containing residential mortgage loans. The total amount of certificates allegedly sold to plaintiff by the Company in this action was approximately $11203 ~~billion~~million. The complaint raises claims under Illinois ~~federal and state securities laws and common~~ law and seeks, among other things, to ~~rescission~~rescind the ~~and~~plaintiff’s ~~compensatory~~purchase ~~and~~of ~~punitive~~such ~~damages~~certificates. On ~~September~~March 2624, 2011, ~~defendants~~the ~~removed~~court ~~the~~granted ~~action~~plaintiff leave to ~~the~~file ~~SDNY~~an ~~and~~amended oncomplaint. ~~October~~On May 2627, 2011, ~~the~~defendants ~~FHFA~~filed ~~moved~~a motion to ~~remand~~dismiss the ~~action~~amended ~~back~~complaint, towhich ~~the~~motion ~~Supreme~~was ~~Court~~denied ofon ~~the~~September 19, ~~State of New York~~2012. The

On- ~~September 2,~~32 2011, the FHFA, as conservator for Freddie Mac, also filed a complaint against the Company and other defendants in the Supreme Court of the State of New York, styled Federal Housing Finance Agency, as Conservator v. General Electric Company et al. The complaint alleges that defendants made untrue statements and material omissions in connection with the sale to Freddie Mac of residential mortgage pass through certificates with an original -

Company filed its answer on December 21, 2012. At January 25, 2013, the current unpaid balance of the mortgage pass through certificates at issue in this case was approximately $105 million, and certain certificates had begun to incur losses. Based on currently available information, the Company believes it could incur a loss up to the difference between the $105 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against the Company, plus pre- 27and post- judgment interest, fees and costs. The Company may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

~~Table~~On July 18, 2011, the Western and Southern Life Insurance Company and certain affiliated companies filed a complaint against the Company and other defendants in the Court of ~~Contents~~Common Pleas in Ohio, styled Western and Southern Life Insurance Company, et al. v. Morgan Stanley Mortgage Capital Inc., et al. An amended complaint was filed on April 2, 2012 and 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 amount of the certificates allegedly sold to plaintiffs by the Company was approximately $153 million. The amended complaint raises claims under the Ohio Securities Act, federal securities laws, and common law and seeks, among other things, to rescind the plaintiffs’ purchases of such certificates. On May 21, 2012, the Company filed a motion to dismiss the amended complaint, which motion was denied on August 3, 2012. The court has set a trial date of November 2013. At January 25, 2013, the current unpaid balance of the mortgage pass through certificates at

~~unpaid~~- ~~balance~~33 of approximately $549 million. The complaint raises claims under federal and state securities laws and common law and seeks, among other things, rescission and compensatory and punitive damages. On October 6, 2011, defendants removed the action to the SDNY and on November 7, 2011, the FHFA moved to remand the action back to the Supreme Court of the State of New York. -

Onissue ~~November 4, 2011, the Federal Deposit Insurance Corporation, as receiver for Franklin Bank S.S.B, filed two complaints against the Company~~ in ~~the~~this ~~District~~case Court of the State of Texas. Each is 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. and alleges that the Company made untrue statements and material omissions in connection with the sale to plaintiff of mortgage pass through certificates backed by securitization trusts containing residential mortgage loans. The amount of certificates allegedly underwritten and sold to plaintiff by the Company in these cases was approximately $67123 million ~~and $35 million~~, ~~respectively. The complaints each raise claims under both federal securities law~~ and ~~the~~certain ~~Texas~~certificates ~~Securities~~had ~~Act~~begun ~~and~~to ~~each~~incur ~~seeks, among other things, compensatory damages associated with plaintiff’s purchase of such certificates~~losses.

~~On January 20,~~Based ~~2012~~on currently available information, ~~Sealink~~the ~~Funding~~Company ~~Limited~~believes ~~filed~~it could incur a ~~complaint against~~loss up to the ~~Company~~difference inbetween the ~~Supreme~~$123 ~~Court~~million ofunpaid ~~the~~balance ~~State~~ of ~~New~~these ~~York~~certificates ~~styled Sealink~~(plus ~~Funding~~any ~~Limited~~losses v.incurred) ~~Morgan~~and ~~Stanley,~~their etfair ~~al. Plaintiff~~market ~~purports~~value toat be the ~~assignee of~~time ~~claims~~ of ~~certain~~a ~~special~~judgment ~~purpose~~against ~~vehicles~~the ~~(“SPVs”)~~Company, ~~formerly~~plus ~~sponsored~~post-judgment byinterest, ~~SachsenLB~~fees ~~Europe.~~and costs. The ~~complaint~~Company ~~alleges~~may ~~that~~be ~~defendants~~entitled ~~made~~to ~~untrue~~an ~~statements~~offset ~~and~~for ~~material~~interest ~~omissions~~received inby the ~~sale~~plaintiff prior to ~~the~~a ~~SPVs of certain mortgage pass through~~ judgment.

-On 28September 2, - 2011, the Federal Housing Finance Agency (“FHFA”), as conservator for Fannie Mae and Freddie Mac, filed 17 complaints against numerous financial services companies, including the Company. A complaint against the Company and other defendants was filed in the Supreme Court of NY, NY County, styled Federal Housing Finance Agency, as Conservator v. Morgan Stanley et al. The complaint alleges that defendants made untrue statements and material omissions in connection with the sale to Fannie Mae and Freddie Mac of residential mortgage pass through certificates with an original unpaid balance of approximately $11 billion. The complaint raises claims under federal and state securities laws and common law and seeks, among other things, rescission and compensatory and punitive damages. On September 26, 2011, defendants removed the action to the SDNY and on October 26, 2011, the FHFA moved to remand the action back to the Supreme Court of the State of New York. On May 11, 2012, plaintiff withdrew its motion to remand. On July 13, 2012, the Company filed a motion to dismiss the complaint, which motion was denied in large part on November 19, 2012. Trial is currently scheduled to begin in January 2015. At January 25, 2013, the current unpaid balance of the mortgage pass through

~~Table~~- of34 ~~Contents~~-

certificates ~~backed~~at byissue ~~securitization~~in ~~trusts~~these ~~containing~~cases ~~residential~~was ~~mortgage~~approximately ~~loans~~$2.9 ~~The~~billion, ~~total~~and ~~amount~~the certificates had incurred losses in excess of ~~certificates~~$40 ~~allegedly~~million. Based ~~issued~~on bycurrently available information, the Company ~~and/or~~believes ~~sold~~it bycould incur a loss up to the ~~Company~~difference ~~was~~between ~~approximately $556~~the ~~million~~$2. ~~The~~9 ~~complaint~~billion ~~raises~~unpaid ~~common~~balance ~~law~~of ~~claims~~these ofcertificates ~~fraud, fraudulent~~(plus ~~inducement,~~any ~~aiding~~losses incurred) and ~~abetting~~their ~~fraud~~fair ~~and~~market ~~negligent~~value ~~misrepresentation~~at ~~and~~the ~~seeks~~time of a judgment against the Company, ~~among~~plus ~~other~~pre- ~~things~~and post-judgment interest, ~~compensatory~~ fees and~~/or~~ ~~rescissionary~~costs. ~~damages associated with plaintiffs’~~The ~~purchases~~Company may be entitled to be indemnified for some of ~~such~~these ~~certificates.~~losses and to an offset for interest received by the plaintiff prior to a judgment.

OnItem ~~January 25, 2012, Dexia SA/NV and certain of its affiliated entities filed a complaint against the Company in the Supreme Court of the State of New York styled Dexia SA/NV et al~~4. MINE v.SAFETY 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 issued by the Company and/or sold to plaintiffs by the Company was approximately $680 million. The complaint raises common law claims of fraud, fraudulent inducement, aiding and abetting fraud and negligent misrepresentation and seeks, among other things, compensatory and/or rescissionary damages associated with plaintiffs’ purchases of such certificates. DISCLOSURES

OnNot ~~January 25, 2012, Bayerische Landesbank, New York Branch filed a complaint against the Company in the Supreme Court of the State of New York styled Bayerische Landesbank, New York Branch v~~applicable. Morgan Stanley, et al. The complaint alleges that defendants made untrue statements and material omissions in the sale to plaintiff of certain mortgage pass through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly issued by the Company and/or sold to plaintiff by the Company was

- 2935 -

~~Table~~PART ~~of Contents~~II

~~approximately~~Item ~~$486 million~~5. ~~The~~ ~~complaint~~MARKET ~~raises~~FOR ~~common~~REGISTRANT'S ~~law~~COMMON ~~claims of fraud~~EQUITY, ~~fraudulent~~ ~~inducement,~~RELATED ~~aiding~~STOCKHOLDER ~~and~~MATTERS ~~abetting~~AND ~~fraud~~ISSUER ~~and~~PURCHASES ~~negligent~~OF ~~misrepresentation~~EQUITY ~~and seeks, among other things, compensatory and/or rescissionary damages associated with plaintiffs’ purchases of such certificates.~~ SECURITIES

~~Other~~(a) Market ~~Matters~~Information. The OnPartnership ahas ~~case-by-case~~issued ~~basis~~no ~~the~~stock. There ~~Company~~is ~~has~~no ~~entered~~established ~~into~~public ~~agreements~~trading tomarket ~~toll~~for ~~the~~Units ~~statute~~ of ~~limitations applicable to potential civil claims related to RMBS, CDOs and other mortgage-related products and services when~~ the ~~Company has concluded that it is in its interest to do so~~Partnership.

~~On October 18, 2011, the Company received a letter from Gibbs & Bruns LLP~~ (~~the “Law Firm”~~b)~~, which is purportedly representing a group of investment advisers and holders of mortgage pass through certificates issued by RMBS trusts that were sponsored or underwritten by the Company~~ Holders. The ~~letter~~number ~~asserted that the Law Firm’s clients collectively hold 25% or more~~ of ~~the~~holders voting rights in 17 RMBS trusts sponsored or underwritten by the Company and that these trusts have an aggregate outstanding balance exceeding $6 billion. The letter alleged generally that large numbers of ~~mortgages~~Units inat ~~these~~December trusts were sold or deposited into the trusts based on false and/or fraudulent representations and warranties by the mortgage originators, sellers and/or depositors. The letter also alleged generally that there is evidence suggesting that the Company has failed prudently to service mortgage loans in these trusts. On January 31, 2012, ~~the~~was ~~Law~~approximately ~~Firm announced that its clients hold over 25% of the voting rights in 69 RMBS trusts securing over $25 billion of~~ 1,820.

-(c) Distributions. 30No - distributions have been made by the Partnership since it commenced trading operations on November 2, 1994. Ceres has sole discretion to decide what distributions, if any, shall be made to investors in the Partnership. Ceres currently does not intend to make any distributions of the Partnership’s profits.

~~Table~~- of36 ~~Contents~~-

~~RMBS~~Item ~~sponsored or underwritten by the Company, and that its clients had issued instructions to the trustees of these trusts to open investigations into allegedly ineligible mortgages held by these trusts~~6. SELECTED ~~The~~FINANCIAL ~~Law~~DATA ~~Firm’s~~(in ~~press release also indicated that the Law Firm’s clients anticipate that they may provide additional instructions to the trustees, as needed, to further the investigations.~~ dollars)

~~Shareholder~~For ~~Derivative~~the ~~Matter.~~Years Ended December 31,

On February 11, 2010, a shareholder derivative complaint styled Security, Police and Fire Professionals of America Retirement Fund, et al. v. John J. Mack et al. was filed in the Supreme Court of the State of New York. The complaint is purportedly for the benefit of the Company, and is brought against certain current and former directors and officers of the Company, to recover damages for alleged acts of corporate waste, breaches of the duty of loyalty, and unjust enrichment based on the amount of compensation awarded to an undefined group of employees for fiscal years 2006, 2007 and 2009. The complaint seeks, among other relief, unspecified compensatory damages, restitution and disgorgement of compensation, benefits and profits, and institution of certain corporate governance reforms. On December 9, 2010, the court granted defendants’ motion to dismiss the complaint and on February 4, 2011, plaintiffs noticed an appeal of that dismissal, which appeal is pending.

	2012	2011	2010	2009	2008
	$	$	$	$	$
Total Trading Results
including interest income	131,727	(1,483,199)	3,524,667	(1,966,205)	6,074,572

Net Income (Loss)	(650,926)	(2,494,288)	2,323,602	(3,430,636)	3,338,348

Net Income (Loss) Per
Unit (Limited & General
Partners)	(0.77)	(2.29)	1.89	(2.27)	1.87

Total Assets	11,285,476	14,414,057	19,740,428	20,063,502	32,260,514

Total Limited Partners’
Capital	10,917,812	13,888,123	19,232,434	19,608,456	30,071,901

Net Asset Value Per Unit	14.06	14.83	17.12	15.23	17.50

~~China~~- ~~Matter.~~37 -

AsItem ~~disclosed in February 2009, the Company uncovered actions initiated by an employee based in China in an overseas real estate subsidiary that appear to have violated the Foreign Corrupt Practices Act~~7. ~~The~~ ~~Company~~MANAGEMENT'S ~~terminated~~DISCUSSION ~~the~~AND ~~employee,~~ANALYSIS ~~reported~~OF ~~the~~FINANCIAL ~~activity~~CONDITION toAND ~~appropriate~~RESULTS ~~authorities~~OF ~~and is cooperating with investigations by the United States Department of Justice and the SEC.~~ OPERATIONS

-As of December 31, - 2012, the percentage of assets allocated to each market sector was approximately as follows: Interest Rate 18.41%; Currency 50.21%; Equity 14.48%; and Commodity 16.90%.

~~Table~~Liquidity. The Partnership deposits its assets with 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 ~~Contents~~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 ~~following~~Partnership’s ~~matters~~investment ~~were~~in ~~terminated~~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 fluctuations limits” or “daily limits”. Trades may not be executed at prices beyond the ~~quarter~~daily ~~ended~~limit. If ~~December 31~~the price for a particular futures or options contract has increased or decreased by an amount equal to the daily limit, ~~2011:~~ 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.

In- Re38 Washington Mutual, Inc. Securities Litigation, which had been pending in the United States District Court for the Western District of Washington, involved claims under the Securities Act related to three offerings by Washington Mutual Inc. in 2006 and 2007. The Company was one of several underwriters who participated in the offerings. The Company underwrote approximately $1.3 billion of the securities covered by the class certified by the court. On November 4, 2011, a final settlement among the parties was approved by the court. -

~~Employees’~~There ~~Retirement~~is ~~System~~no oflimitation ~~the~~on ~~Government~~daily ofprice ~~the~~moves ~~Virgin~~in ~~Islands~~trading v.forward ~~Morgan~~contracts ~~Stanley &~~on Coforeign currencies. The ~~Incorporated,~~markets etfor ~~al.~~some world currencies have low trading volume and are illiquid, which ~~had~~may ~~been~~prevent ~~pending~~the Partnership from trading in potentially profitable markets or prevent the ~~SDNY~~Partnership from promptly liquidating unfavorable positions in such markets, ~~involved~~subjecting ~~claims~~it ~~for~~to ~~common~~substantial ~~law fraud~~losses. Either ~~and~~of ~~unjust~~these ~~enrichment~~market ~~against~~conditions ~~the~~could ~~Company~~result ~~related~~in torestrictions on redemptions. For the ~~Libertas~~periods ~~III~~covered ~~CDO.~~by Onthis ~~November 3~~report, ~~2011,~~illiquidity ~~the~~has ~~Court~~not ~~dismissed~~materially affected the ~~action~~Partnership’s ~~with prejudice~~assets.

~~MBIA~~There ~~Insurance~~are ~~Corporation~~no v.known ~~Morgan~~material ~~Stanley~~trends, ~~et al. which had been pending in New York Supreme Court~~demands, ~~Westchester County~~commitments, ~~involved claims for fraud~~events, ~~breach~~or ofuncertainties ~~contract~~at ~~and unjust enrichment against~~ the ~~Company~~present ~~related~~time tothat ~~MBIA~~are ~~Insurance~~reasonably ~~Corporation’s~~likely ~~(“MBIA’s”) contract~~ to ~~insure~~result ~~approximately $223 million of residential mortgage pass through certificates related a second lien securitization sponsored by the Company~~ in ~~June 2007. On December 13, 2011,~~ the ~~Company~~Partnership’s ~~and~~liquidity ~~MBIA~~increasing ~~entered~~or ~~into~~decreasing anin ~~agreement~~any tomaterial ~~settle this litigation and to resolve certain claims that the Company had against MBIA~~way.

-Capital 32Resources. The - Partnership does not have, nor does it expect to have, any capital assets. Redemptions of Units 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.

~~Table~~There ofare ~~Contents~~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.

~~Item 4.~~- ~~MINE~~39 ~~SAFETY DISCLOSURES~~ -

~~Not~~Results ~~applicable.~~of Operations

-General. The 33Partnership’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, forwards and options markets.

~~Table~~SSARIS trades its Global Multi-Strategy Program on behalf of ~~Contents~~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.

~~PART~~Altis IItrades 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

~~Item 5.~~- ~~MARKET~~40 ~~FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES~~ -

~~(a)~~portfolio ~~Market~~management ~~Information.~~technology ~~There~~combines isoriginal, notraditional ~~established~~and ~~public~~contrasting ~~trading~~investment ~~market for Units of the Partnership.~~techniques

~~(b)~~into ~~Holders~~one complete and comprehensive trading system. Investment ~~The~~changes ~~number~~are ofimplemented ~~holders~~after ofconsidering ~~Units~~their ateffect ~~December~~on ~~31,~~the ~~2011,~~whole ~~was~~portfolio ~~approximately~~not ~~2,205~~just the individual markets concerned.

~~(c)~~C-View ~~Distributions.~~trades Noits ~~distributions~~C-View ~~have~~Limited ~~been~~Managed ~~made~~Account by3X ~~the~~Program ~~Partnership~~at ~~since~~2x itleverage. C-View’s ~~commenced~~program ~~trading~~trades ~~operations~~spot onand ~~November~~forward 2foreign exchange in the interbank market, ~~1994.~~non-deliverable ~~Ceres~~forwards ~~has~~and ~~sole~~OTC ~~discretion~~currency tooptions. ~~decide~~C-View’s ~~what~~approach ~~distributions~~is discretionary, ifbased ~~any,~~on ~~shall~~a becombination ~~made~~of tofundamental ~~investors~~analysis, intechnical ~~the~~analysis ~~Partnership~~and market psychology. ~~Ceres~~The ~~currently~~intention ~~does~~is ~~not~~to ~~intend~~capture profits from short to ~~make~~medium-term ~~any~~price ~~distributions~~trends ofwhile ~~the~~maintaining ~~Partnership’s~~profitability ~~profits~~in ranging markets.

~~(d)~~The ~~Underwriter.~~following ~~The~~chart ~~managing~~sets ~~underwriter~~forth ~~for~~the percentage and the amount of the Partnership’s ~~was~~net ~~MS&Co~~assets allocated to each Trading Advisor for the period ending December 31, 2012, and September 30, 2012, respectively, and the change during the applicable period.

(e) Use of Proceeds. All Units remaining unsold after the November 30, 2008 closing were deregistered with the SEC effective January 23, 2009.

Trading Advisor	Allocations as of December 31, 2012 (%)	Allocations as of September 30, 2012 (%)	Allocations as of December 31, 2012($)	Allocations as of September 30, 2012 ($)	Change during the period

SSARIS	34.56%	32.92%	3,832,109	4,018,358	-4.63%
Altis	36.48%	35.43%	4,045,385	4,324,511	-6.45%
C-View	28.96%	31.65%	3,211,210	3,864,166	-16.90%

-The 34following - presents a summary of the Partnership’s operations for each of the three years in the period ended December 31, 2012, 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.

~~Table~~- of41 ~~Contents~~-

~~Item 6.~~The ~~SELECTED~~Partnership’s ~~FINANCIAL~~results ~~DATA~~of operations set forth in the financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which require the use of certain accounting policies that affect the amounts reported in ~~dollars~~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.

	For the Years Ended December 31,
	2011			2010		2009			2008		2007
	$			$		$			$		$
Total Trading Results including interest income		(1,483,199	)		3,524,667		(1,966,205	)		6,074,572		2,254,690
Net Income (Loss)		(2,494,288	)		2,323,602		(3,430,636	)		3,338,348		42,657
Net Income (Loss) Per Unit (Limited & General Partners)		(2.29	)		1.89		(2.27	)		1.87		0.03
Total Assets		14,414,057			19,740,428		20,063,502			32,260,514		35,508,351
Total Limited Partners’
Capital		13,888,123			19,232,434		19,608,456			30,071,901		34,537,771
Net Asset Value Per Unit		14.83			17.12		15.23			17.50		15.63

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.

-The 35Partnership - recorded total trading results including interest income totaling $131,727 and expenses totaling $782,653, resulting in a net loss of $650,926 for the year ended December 31, 2012. The Partnership’s net asset value per Unit decreased from $14.83 at December 31, 2011, to $14.06 at December 31, 2012. Total redemptions for the year was $2,328,654, and the Partnership’s ending capital was

~~Table~~- of42 ~~Contents~~-

~~Item 7.~~$11,088,704 ~~MANAGEMENT’S~~at ~~DISCUSSION~~December ~~AND~~31, ~~ANALYSIS~~2012, OFa ~~FINANCIAL CONDITION~~decrease ~~AND~~of ~~RESULTS~~$2,979,580 OFfrom ~~OPERATIONS~~ending capital at December 31, 2011, of $14,068,284.

AsDuring ofthe ~~December 31~~year, ~~2011~~the Partnership posted a loss in net asset value as profits from trading in currencies, stock indices and energies were offset by losses from trading metals, agriculturals and global interest rates. The most significant trading gains were achieved in November and December from short positions in the ~~percentage~~Japanese yen versus the U.S. dollar as the newly elected Liberal Democratic Party government pledged to increase fiscal stimulus in an effort to strengthen the Japanese economy. The increased likelihood of ~~assets~~monetary ~~allocated~~easing by the Bank of Japan further decreased the relative value of the yen. Gains in the currency sector were also recorded in July from short positions in the euro as the value of the euro declined to ~~each~~the ~~market~~ lowest level versus the U.S. dollar in more than two years after European Central Bank President Mario Draghi said the currency bloc faced risks after policy makers cut interest rates to a record low. In the global stock index sector, ~~was~~long ~~approximately~~positions in U.S. and Pacific Rim futures recorded gains in February as ~~follows:~~prices ~~Interest~~rose ~~Rate~~amid 18positive economic news, including a better-than-expected U.~~24%;~~S. ~~Currency~~employment 40report and an expansion in manufacturing in China, Europe, and the U.~~24%;~~S. ~~Equity~~Prices 8continued to advance after China cut banks’ reserve requirements to fuel lending and buoy growth.~~84%;~~ Within the energy markets, gains were achieved throughout the majority of the first quarter from short positions in natural gas futures as prices dropped amid ample inventories and ~~Commodity~~mild 32weather across the U.~~68%~~S. Additional gains were experienced in this sector during February from long futures positions in RBOB (unleaded) gasoline and Brent crude oil as prices increased on concerns over inventory levels and rising tensions in the Middle East. The Partnership’s gains for the year were offset by losses in the metals complex, agriculturals and global interest rate futures. Throughout the fourth quarter, losses in the metals sector were recorded from long positions in silver and gold futures

~~Liquidity. The Partnership deposits its assets with MSSB as non~~-~~clearing~~ ~~commodity~~43 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 Commodity Futures Trading Commission 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~~as ~~Partnership’s~~prices ~~investment~~fell inon ~~futures,~~a ~~forwards~~strengthening ~~and~~of ~~options~~the ~~may,~~U.S. ~~from~~dollar ~~time~~which tocurbed ~~time,~~demand befor ~~illiquid.~~the ~~Most~~precious Umetals.S. ~~futures~~Losses ~~exchanges~~were ~~limit fluctuations~~also experienced in ~~prices~~October ~~during~~from along ~~single~~positions ~~day~~in byzinc ~~regulations~~and ~~referred~~lead tofutures as ~~“daily~~prices ~~price~~declined ~~fluctuations~~amid ~~limits”~~reports orthat ~~“daily~~stockpiles ~~limits”.~~in ~~Trades~~both ~~may~~metals ~~not~~hit beyear ~~executed~~long athighs ~~prices~~early ~~beyond~~in the ~~daily limit~~month. IfWithin the ~~price~~agricultural ~~for~~complex, alosses ~~particular~~were ~~futures~~experienced ~~or options~~during ~~contract~~June ~~has~~from ~~increased~~short orpositions ~~decreased~~in bycorn anfutures ~~amount~~as ~~equal~~prices toclimbed higher after inventories tumbled the ~~daily~~most ~~limit~~in 16 years, and on speculation hot, dry weather would increase stress on crops in the U.S. Additional losses were recorded in the interest rate sector during October from long positions in ~~that~~U.S. ~~futures~~5-year orTreasury ~~options~~notes ~~contract~~and ~~can~~10-year ~~neither~~Long beGilt ~~taken~~futures. ~~nor~~Prices ~~liquidated~~for ~~unless~~the ~~traders~~U.S. ~~are~~interest ~~willing~~rate futures moved lower due to ~~effect~~a ~~trades~~stronger-than-expected atU.S. orjobs ~~within~~report. This led to a sell-off in the ~~limit~~bond market which dragged U.S. ~~Futures~~fixed income futures prices ~~have~~ ~~occasionally~~down. ~~moved~~In Europe, a signal from the ~~daily~~German ~~limit~~government ~~for~~in ~~several~~the ~~consecutive~~early ~~days~~stages ~~with~~of ~~little~~the orfourth noquarter ~~trading.~~that ~~These~~it ~~market~~would ~~conditions~~be ~~could~~open ~~prevent~~to ~~the~~a ~~Partnership~~bailout ~~from~~of ~~promptly~~Spain ~~liquidating~~reduced ~~its~~the ~~futures~~attractiveness orof ~~options~~European ~~contracts~~debt ~~and~~as ~~result~~an ininvestment ~~restrictions~~safe ~~on redemptions~~haven.

-The 36Partnership - recorded total trading results including interest income totaling $(1,483,199) and expenses totaling $1,011,089, resulting in a net loss of $2,494,288 for the year ended December 31, 2011. The Partnership’s net asset value per Unit decreased from $17.12 at December 31, 2010 to $14.83 at December 31, 2011. Total redemptions for the year were $2,877,935, and the Partnership’s ending

~~Table~~capital was $14,068,284 at December 31, 2011, a decrease of ~~Contents~~$5,372,223 from ending capital at December 31, 2010, of $19,440,507.

~~There~~The ismost nosignificant ~~limitation on daily price moves in~~ trading ~~forward~~losses ~~contracts~~during onthe ~~foreign currencies.~~year ~~The~~were ~~markets~~recorded ~~for~~within ~~some~~the ~~world~~global ~~currencies~~stock ~~have~~index, ~~low~~primarily ~~trading~~during ~~volume~~June, ~~and are illiquid~~July, ~~which~~and ~~may~~August. ~~prevent~~In ~~the~~June, ~~Partnership~~long ~~from~~positions ~~trading~~ in ~~potentially~~European ~~profitable~~and ~~markets~~U.S. orequity ~~prevent~~index ~~the~~futures ~~Partnership~~resulted ~~from promptly liquidating unfavorable positions~~ in ~~such markets, subjecting it to substantial~~ losses. ~~Either~~as ofprices ~~these~~moved ~~market~~lower ~~conditions could result in restrictions~~ on ~~redemptions.~~concern ~~For~~about the ~~periods~~overall ~~covered~~pace byof ~~this report, illiquidity has not materially affected~~ the ~~Partnership’s assets.~~ global

~~There~~- ~~are~~44 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. -

~~Capital~~economic ~~Resources~~recovery. ~~The~~ ~~Partnership~~Additional ~~does~~losses ~~not~~were ~~have,~~incurred ~~nor~~during ~~does~~July itand ~~expect~~August from long positions in European and U.S. equity index futures as prices dropped in response to ~~have~~the European debt crisis and Standard & Poor’s downgrade of the United States’ sovereign credit rating. Within the agricultural complex, ~~any~~losses ~~capital~~were ~~assets~~recorded during March from long positions in corn futures as prices fell after a U.S. ~~Redemptions~~Department of ~~Units~~Agriculture report revealed increasing world stockpiles and declining U.S. exports of the crop. Further losses were recorded in long cocoa positions as prices dropped on signs that the ~~future~~political ~~will~~turmoil ~~affect~~in the ~~amount~~Ivory ofCoast ~~funds~~that ~~available~~had ~~for~~hampered ~~investments~~exports might be easing. Additional losses were incurred during April from long positions in cotton futures as prices declined on concern that demand may slow from China, ~~forwards~~the ~~and~~world’s ~~options~~biggest inbuyer ~~subsequent~~of ~~periods~~the fiber. ItWithin isthe ~~not~~currency ~~possible~~sector, losses were experienced during 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 may take additional measures to ~~estimate~~ counter the ~~amount~~sovereign debt crisis, while the Standard and ~~therefore~~Poor’s reduced Japan’s credit rating over elevated fiscal deficits. Further losses were incurred in September from long positions in the ~~impact~~New Zealand dollar versus the U.S. dollar, short positions in the British pound versus the Australian dollar, and long positions in the Australian dollar versus the Canadian dollar as the value of ~~future~~the ~~outflows~~New Zealand dollar and Australian dollar moved lower in tandem with declining commodity prices. Within the metals sector, losses were incurred in October from short positions in nickel, platinum, zinc, and copper as prices rose on speculation of ~~Units~~increased demand in China. Additional losses were incurred during March from 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 may slow the global economy. Lastly, modest losses were incurred within the energy sector, primarily during May, due to long futures positions in refined oil products as prices moved lower

~~There~~- ~~are~~45 ~~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.~~ -

-on 37speculation that a weakening global economy and the European debt crisis may lead to reduced energy demand. A portion of the Partnership’s losses for the year was offset by gains achieved within the global interest rate sector during July, August, and September from long positions in European and U.S. fixed income futures as prices advanced higher throughout the majority of the third quarter due to concern about the European sovereign debt crisis and a faltering global economy. Additional gains were achieved during May from long positions in U.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.

~~Table~~The Partnership recorded total trading results including interest income totaling $3,524,667 and expenses totaling $1,201,065, resulting in net income of ~~Contents~~$2,323,602 for the year ended December 31, 2010. The Partnership’s net asset value per Unit increased from $15.23 at December 31, 2009, to $17.12 at December 31, 2010. Total redemptions for the year were $2,692,445, and the Partnership’s ending capital was $19,440,507 at December 31, 2010, a decrease of $368,843 from ending capital at December 31, 2009, of $19,809,350.

~~Results~~The most significant trading gains were experienced in the global interest rate sector throughout a majority of ~~Operations~~the first nine months of the year from long positions in European, U.S., and Japanese fixed-income futures. In this sector, prices increased during the first quarter on concerns that lending restrictions in China, possible reductions in U.S. stimulus measures, and Greece’s fiscal struggles might stifle the global economic rebound. Prices were then pressured higher during the second quarter amid an unexpected drop in U.S. consumer confidence, increased regulatory scrutiny of the financial industry, and the growing European debt crisis. During the third quarter, prices continued to climb higher due to concern that

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, forwards and options markets. SSARIS trades its Global Multi-~~Strategy~~ ~~Program~~46 ~~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.

~~Altis~~European ~~trades~~governments ~~its~~may ~~Global~~struggle ~~Futures~~to ~~Portfolio~~repay ~~Program~~their ~~on behalf~~debt ofand ~~the~~Chinese ~~Partnership~~economic growth may be slowing. ItWithin isthe acurrency ~~systematic~~markets, ~~automated~~gains ~~trading~~were ~~program~~achieved ~~that~~primarily ~~builds~~during onFebruary, March, and April from short positions in the ~~market~~euro ~~experience~~versus the U.S. dollar as the value of ~~Altis~~the euro declined against the U.S. dollar amid concerns that Greece’s ~~principals~~mounting debt burden might spread to other European nations. During March and ~~employs~~April, additional currency gains were recorded from long positions in the Mexican peso versus the U.S. dollar as the value of the U.S. dollar fell against the Mexican peso after U.S. retail sales unexpectedly increased and a ~~unique~~U.S. ~~proprietary~~report ~~Advanced~~showed ~~Asset~~jobs ~~Allocator~~increased the most in three years, diminishing “safe haven” demand for the U.S. ~~The~~dollar. ~~Advanced~~In ~~Asset~~August, ~~Allocator~~further ~~was~~gains ~~specifically developed~~were toachieved ~~manage~~from ~~portfolios~~long positions in the Japanese yen versus the British pound, Swiss franc, and U.S. dollar as the value of ~~derivative~~the ~~instruments~~Japanese yen increased relative to these currencies on speculation that reports might show U.S. expansion decelerated, thereby spurring investors to unwind existing carry trades. During December, additional currency gains were recorded due to short positions in athe ~~robust~~British pound versus the Australian dollar, Japanese yen, and ~~scalable~~Swiss ~~manner~~franc as the value of the British pound declined against these currencies following lower-than-expected mortgage approval figures in the United Kingdom. ~~The~~Within ~~portfolio~~the ~~management~~agricultural ~~technology~~complex, ~~combines~~gains ~~original~~were recorded primarily during March, ~~traditional~~September, and ~~contrasting~~October. ~~investment~~During ~~techniques~~March, ~~into~~long ~~one~~futures ~~complete~~positions in live cattle and ~~comprehensive~~feeder ~~trading~~cattle ~~system. Investment~~resulted ~~changes~~in ~~are~~gains ~~implemented~~as prices rose after ~~considering~~a ~~their~~U.S. ~~effect~~Department of Agriculture report showed demand might increase as supplies shrink. In September, gains were achieved from long positions in cotton futures as prices increased on signs that global demand may outpace limited supplies. Meanwhile, gains were also recorded during December from long futures positions in the ~~whole~~soybean ~~portfolio~~complex ~~not~~as ~~just~~soybean prices reached a 28-month high amid supply concerns due to drought-like conditions in Argentina, the ~~individual~~world’s ~~markets~~third-biggest ~~concerned~~exporter of the crop. In the metals sector, gains were recorded primarily during March from long futures positions in nickel and copper as prices trended higher after China indicated it might boost state reserves of

- 3847 -

~~Table~~base metals. Throughout September, October, November, and December, long futures positions in silver and gold resulted in additional gains within this sector as prices rose amid increased demand for the precious metals due to a drop in the value of ~~Contents~~the U.S. dollar, with silver futures rallying to a 30-year high and gold prices reaching a new all-time high. A portion of the Partnership’s gains for the year was offset by losses incurred within the energy markets, primarily during January, from long futures positions in crude oil and its related products as prices declined amid speculation that China’s economic activity and energy demand may ease. During May, long futures positions in crude oil and its related products resulted in additional losses as prices declined on worries that Europe’s debt troubles might slow down the global economic recovery and thereby weaken energy demand. In September, further losses were recorded in the energy markets due to short futures positions in crude oil and its related products as prices rose after positive economic indicators from the U.S., Asia, and Europe restored confidence that the economic recovery may stimulate energy demand. Within the global stock index sector, losses were experienced primarily during January, May, June, and August. In January, long positions in European, U.S., and Pacific Rim equity index futures resulted in losses as prices moved lower amid disappointing U.S. corporate earnings reports and mounting concerns over sovereign debt defaults from a number of European countries. During May and June, losses in this sector were incurred from long positions in European, U.S., and Japanese equity-index futures as prices moved lower on growing concerns that Greece’s sovereign debt crisis might spread throughout Europe. In August, additional losses were incurred from long positions in U.S. and European equity index futures as prices fell after the U.S. Federal Reserve said the pace of economic recovery is likely to be “more modest” than forecast.

C-~~View~~ ~~trades~~48 ~~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~~For ~~following~~an ~~chart~~analysis ~~sets~~of ~~forth~~unrealized ~~the~~gains ~~percentage~~and (losses) by contract type and ~~the~~a ~~amount~~further description of 2012 trading results, refer to the Partnership’s ~~net~~Annual ~~assets~~Report ~~allocated~~ to ~~each~~Limited ~~Trading~~Partners ~~Advisor~~ for the ~~period~~year ~~ending~~ended December 31, ~~2011~~2012, ~~and~~which ~~December 31, 2010,~~is ~~respectively,~~incorporated ~~and~~by ~~the~~reference ~~change~~to ~~during~~Exhibit ~~the~~13.01 ~~applicable~~of ~~period.~~this Form 10-K.

Trading Advisor	Allocations as ofDecember 31,2011 (%)			Allocations as ofDecember 31,2010 (%)			Allocations as ofDecember 31,2011($)		Allocations as ofDecember 31,2010 ($)		Changeduring theperiod
SSARIS		34.85	%		36.33	%		4,902,702		7,062,717		-30.58	%
Altis		33.37	%		33.61	%		4,695,335		6,533,386		-28.13	%
C-View		31.78	%		30.06	%		4,470,247		5,844,404		-23.51	%

The Partnership’s gains and losses are allocated among its partners for income tax purposes.

~~The~~Off-Balance ~~following~~Sheet ~~presents~~Arrangements ~~a summary of the Partnership’s operations for each of the three years in the period ended December 31, 2011,~~ and aContractual ~~general discussion of its trading activities during each period~~Obligations. 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 39Partnership 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.

~~Table~~Market ~~of Contents~~Risk.

The Partnership’s ~~results~~is ofa ~~operations~~party ~~set~~to ~~forth in the~~ financial ~~statements~~instruments ~~are prepared in accordance~~ with ~~accounting~~elements ~~principles~~of ~~generally~~off-balance ~~accepted~~sheet inmarket ~~the~~and ~~United~~credit ~~States~~risk. The ofPartnership ~~America~~trades ~~(“U.S.~~futures ~~GAAP”)~~contracts, ~~which~~options ~~require~~on ~~the~~futures ~~use~~and offorward ~~certain~~contracts, ~~accounting~~and ~~policies~~forward ~~that~~contracts ~~affect~~on ~~the~~physical ~~amounts~~commodities ~~reported~~and inother ~~these~~commodity ~~financial statements~~interests, including, ~~the~~but ~~following:~~not ~~the~~limited ~~contracts~~to, ~~the~~foreign ~~Partnership~~currencies, ~~trades~~financial ~~are~~instruments, ~~accounted~~metals, ~~for~~energy, ~~on a trade-date basis~~ and ~~marked~~agricultural ~~to market on a daily basis~~products. ~~The~~In ~~difference~~entering ~~between~~into ~~their~~these ~~original~~contracts, ~~contract~~the ~~value~~Partnership ~~and market value~~ is ~~recorded~~subject onto the ~~Statements~~market ~~of Income~~risk ~~and~~that ~~Expenses~~such ascontracts ~~“Net~~may ~~change~~be insignificantly ~~unrealized~~influenced ~~trading~~by ~~profit~~market ~~(loss)” for open (unrealized) contracts~~conditions, ~~and~~such ~~recorded~~ as ~~“Net~~interest ~~realized~~rate ~~trading~~volatility, ~~profit~~resulting ~~(loss)”~~in ~~when~~such ~~open~~contracts ~~positions~~being ~~are~~less ~~closed out~~valuable. If ~~The sum of these amounts constitutes~~ the ~~Partnership’s~~markets ~~trading~~should ~~results.~~move ~~The~~against ~~market~~all ~~value~~ of athe ~~futures~~positions ~~contract~~held isby the ~~settlement~~Partnership ~~price~~at on the ~~exchange~~same ontime, ~~which~~and ~~that~~the ~~futures~~Trading ~~contract~~Advisors iswere ~~traded~~unable onto aoffset ~~particular~~positions ~~day. The value~~ of ~~a foreign currency forward contract is based on~~ the ~~spot rate as of approximately 3:00 P.M. (E.T.)~~Partnership, the ~~close~~Partnership ofcould ~~the~~lose ~~business~~all ~~day.~~of ~~Interest~~its ~~income,~~assets asand ~~well~~the aslimited ~~management~~partners ~~fees,~~would ~~incentive~~realize ~~fees,~~a ~~and~~loss ~~brokerage~~equal ~~fees~~to 100% of ~~the~~their ~~Partnership~~capital ~~are recorded on an accrual basis~~accounts.

~~Ceres~~- ~~believes~~49 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. -

~~The~~In ~~Partnership~~addition ~~recorded~~to ~~total trading~~the ~~results~~Trading ~~including~~Advisors’ ~~interest~~internal ~~income~~controls, ~~totaling~~the ~~$(1,483,199)~~Trading ~~and~~Advisors ~~expenses~~must ~~totaling~~comply ~~$1,011,089,~~with ~~resulting~~the inPartnership’s atrading ~~net~~policies ~~loss~~that ofinclude ~~$2,494,288~~standards for ~~the~~liquidity ~~year~~and ~~ended~~leverage ~~December 31,~~that ~~2011.~~must be maintained. The ~~Partnership’s~~Trading ~~net~~Advisors ~~asset~~and ~~value~~Ceres ~~per~~monitor ~~Unit~~the ~~decreased~~Partnership’s ~~from~~trading ~~$17.12 at~~activities ~~December 31, 2010~~ to ~~$14.83~~ensure atcompliance ~~December 31,~~with ~~2011. Total redemptions for~~ the ~~year~~trading ~~were~~policies ~~$2,877,935,~~ and ~~the~~Ceres ~~Partnership’s~~can ~~ending~~require ~~capital~~the ~~was~~Trading ~~$14,068,284~~Advisors atto ~~December 31,~~modify ~~2011,~~positions aof ~~decrease~~the ofPartnership ~~$5,372,223~~if ~~from~~Ceres ~~ending~~believes ~~capital~~they ~~at December 31,~~violate ~~2010,~~the ofPartnership’s ~~$19,440,507.~~trading policies.

-Credit ~~40 -~~ Risk.

~~Table~~In addition to market risk, in entering into futures, forward, and options contracts, there is a credit risk to the Partnership that the counterparty on a contract will not be able to meet its obligations to the Partnership. The ultimate counterparty or guarantor of ~~Contents~~the Partnership for futures, forward and options contracts traded in the United States and most foreign exchanges on which the Partnership trades is the clearinghouse associated with such exchange. In general, a clearinghouse is backed by the membership of the exchange and will act in the event of non-performance by one of its members or one of its member’s customers, which should significantly reduce this credit risk. There is no assurance that a clearinghouse, exchange, or other exchange member will meet its obligations to the Partnership, and Ceres and the commodity brokers will not indemnify the Partnership against a default by such parties. Further, the law is unclear as to whether a commodity broker has any obligation to protect its customers from loss in the event of an exchange or clearinghouse defaulting on trades effected for the broker’s customers. In cases where the Partnership trades off-exchange forward contracts with a counterparty, the sole recourse of the Partnership will be the forward contract’s counterparty.

~~The~~- ~~most~~50 significant trading losses during the year were recorded within the global stock index, primarily during June, July, and August. In June, long positions in European and U.S. equity index futures resulted in losses as prices moved lower on concern about the overall pace of the global economic recovery. Additional losses were incurred during July and August from long positions in European and U.S. equity index futures as prices dropped in response to the European debt crisis and Standard & Poor’s downgrade of the United States’ sovereign credit rating. Within the agricultural complex, losses were recorded 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 positions as prices dropped on signs that the political turmoil in the Ivory Coast that had hampered exports might be easing. Additional losses were incurred during April from long positions in cotton futures as prices declined on concern that demand may slow from China, the world’s biggest buyer of the fiber. Within the currency sector, losses were experienced during 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 may take additional measures to counter the sovereign debt crisis, while the Standard and Poor’s reduced Japan’s credit rating over elevated fiscal deficits. Further losses were incurred in September from long positions in the New Zealand dollar versus the U.S. dollar, short positions in the British pound versus the Australian dollar, and long positions in the Australian dollar versus the Canadian dollar as the value of the New Zealand dollar and Australian dollar moved lower in tandem -

-Ceres 41deals - with these credit risks of the Partnership in several ways. First, Ceres monitors the Partnership’s credit exposure to each exchange on a daily basis. The commodity brokers inform the Partnership, as with all of their customers, of the Partnership’s net margin requirements for all of its existing open positions, and Ceres has installed a system which permits it to monitor the Partnership’s potential net credit exposure, exchange by exchange, by adding the unrealized trading gains on each exchange, if any, to the Partnership’s margin liability thereon.

~~Table~~Second, the Partnership’s trading policies limit the amount of ~~Contents~~its net assets that can be committed at any given time to futures contracts and require a minimum amount of diversification in the Partnership’s trading, usually over several different products and exchanges. Historically, the Partnership’s exposure to any one exchange has typically amounted to only a small percentage of its total net assets and on those relatively few occasions where the Partnership’s credit exposure climbs above such level, Ceres deals with the situation on a case by case basis, carefully weighing whether the increased level of credit exposure remains appropriate. Material changes to the trading policies may be made only with the prior written approval of the limited partners owning more than 50% of Units then outstanding.

~~with declining commodity prices. Within the metals sector~~Third, ~~losses~~with ~~were~~respect ~~incurred~~to inforward ~~October from short positions in nickel, platinum, zinc,~~ and ~~copper~~options ~~as prices rose~~ on ~~speculation~~forward ofcontract ~~increased demand~~trading, inthe ~~China.~~Partnership ~~Additional~~trades ~~losses~~with ~~were~~only ~~incurred~~those ~~during~~counterparties ~~March~~which ~~from long positions in nickel~~Ceres, ~~copper,~~together ~~and zinc futures as prices moved lower amid concern that rising energy costs associated~~ with ~~mounting unrest in the Middle East may slow the global economy~~MS&Co. ~~Lastly~~, ~~modest~~has ~~losses~~determined ~~were incurred within the energy sector, primarily during May, due~~ to ~~long~~be ~~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~~creditworthy. The ~~A portion of the~~ Partnership’s ~~losses~~presently ~~for~~deals ~~the~~with ~~year was offset by gains achieved within the global interest rate sector during July, August, and September from long positions in European and U~~MS&Co.S. ~~fixed income futures~~ as ~~prices~~the ~~advanced~~sole ~~higher~~counterparty ~~throughout~~on ~~the~~all ~~majority~~trading of ~~the~~foreign ~~third~~currency ~~quarter~~forward ~~due~~contracts ~~to concern about the European sovereign debt crisis~~ and aMSCG ~~faltering global economy. Additional gains were achieved during May from long positions in U.S. fixed-income futures~~ as ~~prices increased following reports that showed~~ the ~~U.S.~~sole ~~economy~~counterparty ~~grew~~on ~~less~~all ~~than~~trading ~~forecast~~of ~~and~~options ~~U.S.~~on ~~jobless~~foreign ~~claims~~currency ~~unexpectedly~~forward ~~rose~~contracts.

~~The~~- ~~Partnership~~51 recorded total trading results including interest income totaling $3,524,667 and expenses totaling $1,201,065, resulting in net income of $2,323,602 for the year ended December 31, 2010. The Partnership’s net asset value per Unit increased from $15.23 at December 31, 2009, to $17.12 at December 31, 2010. Total redemptions for the year were $2,692,445, and the Partnership’s ending capital was $19,440,507 at December 31, 2010, a decrease of $368,843 from ending capital at December 31, 2009, of $19,809,350. -

-For 42additional information, see the “Financial Instruments” section under “Notes to Financial Statements” in the Partnership’s Annual Report to Limited Partners for the year ended December 31, 2012, which is incorporated by reference to Exhibit 13.01 of this Form 10- K.

~~Table~~Inflation ofhas ~~Contents~~not been a major factor in the Partnership’s operations.

~~The~~Fair ~~most~~Value ~~significant~~Measurements ~~trading gains were experienced in the global interest rate sector throughout a majority of the first nine months of the year from long positions in European, U.S.,~~ and ~~Japanese fixed-income futures~~Disclosures. In this sector, prices increased during the first quarter on concerns that lending restrictions in China, possible reductions in U.S. stimulus measures, and Greece’s fiscal struggles might stifle the global economic rebound. Prices were then pressured higher during the second quarter amid an unexpected drop in U.S. consumer confidence, increased regulatory scrutiny of the financial industry, and the growing European debt crisis. During the third quarter, prices continued to climb higher due to concern that European governments may struggle to repay their debt and Chinese economic growth may be slowing. Within the currency markets, gains were achieved primarily during February, March, and April from short positions in the euro versus the U.S. dollar as the value of the euro declined against the U.S. dollar amid concerns that Greece’s mounting debt burden might spread to other European nations. During March and April, additional currency gains were recorded from long positions in the Mexican peso versus the U.S. dollar as the value of the U.S. dollar fell against the Mexican peso after U.S. retail sales unexpectedly increased and a U.S. report showed jobs increased the most in three years, diminishing “safe haven” demand for the U.S. dollar. In August, further gains were achieved from long positions in the Japanese yen versus the British pound, Swiss franc, and U.S. dollar as the value of the Japanese yen increased relative to these currencies on speculation that reports might show U.S. expansion decelerated, thereby spurring investors to unwind existing carry trades. During December, additional currency gains were recorded due to short positions in the British pound versus the Australian dollar, Japanese yen, and Swiss franc as the value of the British pound declined against these currencies following lower-than-expected mortgage approval figures in the United Kingdom. Within the agricultural complex, gains were recorded primarily during March, September, and October. During March, long futures positions in live cattle and feeder cattle

-Effective 43January 1, 2012, the Partnership adopted Accounting Standards Update (“ASU”) 2011- 04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”). The amendments within this ASU change the wording used to 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 Financial Accounting Standard Board’s (“FASB”) 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.

~~Table~~Financial ofinstruments ~~Contents~~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

resulted in gains as prices rose after a U.S. Department of Agriculture report showed demand might increase as supplies shrink. In September, gains were achieved from long positions in cotton futures as prices increased on signs that global demand may outpace limited supplies. Meanwhile, gains were also recorded during December from long futures positions in the soybean complex as soybean prices reached a 28-~~month~~ ~~high~~52 ~~amid supply concerns due to drought~~-like conditions in Argentina, the world’s third-biggest exporter of the crop. In the metals sector, gains were recorded primarily during March from long futures positions in nickel and copper as prices trended higher after China indicated it might boost state reserves of base metals. Throughout September, October, November, and December, long futures positions in silver and gold resulted in additional gains within this sector as prices rose amid increased demand for the precious metals due to a drop in the value of the U.S. dollar, with silver futures rallying to a 30-year high and gold prices reaching a new all-time high. A portion of the Partnership’s gains for the year was offset by losses incurred within the energy markets, primarily during January, from long futures positions in crude oil and its related products as prices declined amid speculation that China’s economic activity and energy demand may ease. During May, long futures positions in crude oil and its related products resulted in additional losses as prices declined on worries that Europe’s debt troubles might slow down the global economic recovery and thereby weaken energy demand. In September, further losses were recorded in the energy markets due to short futures positions in crude oil and its related products as prices rose after positive economic indicators from the U.S., Asia, and Europe restored confidence that the economic recovery may stimulate energy demand. Within the global stock index sector, losses were experienced primarily during January, May, June, and August. In January, long positions in European, U.S., and Pacific Rim equity index futures resulted in losses as prices moved lower amid disappointing U.S. corporate earnings reports and mounting concerns over sovereign debt defaults from a number of European countries.

-quoted 44market - prices that are observable for the asset or liability, either directly or indirectly (including quoted market prices for similar investments, interest rates, and 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).

~~Table~~In certain cases, the inputs used to measure fair value may fall into different levels of ~~Contents~~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.

~~During~~The ~~May~~Partnership’s ~~and~~assets ~~June, losses in this sector were incurred from long positions in European, U.S.,~~ and ~~Japanese~~liabilities ~~equity-index~~measured ~~futures~~at asfair ~~prices~~value ~~moved lower~~ on ~~growing~~a ~~concerns~~recurring ~~that~~basis ~~Greece’s~~are ~~sovereign~~summarized ~~debt crisis might spread throughout Europe. In August, additional losses were incurred from long positions~~ in ~~U.S. and European equity index futures as prices fell after~~ the ~~U.S.~~following ~~Federal~~tables ~~Reserve~~by ~~said~~ the ~~pace~~type of ~~economic~~inputs ~~recovery~~applicable ~~is likely~~ to bethe ~~“more~~fair ~~modest”~~value ~~than forecast~~measurements.

The Partnership recorded total trading results including interest income totaling $(1,966,205) and expenses totaling $1,464,431, resulting in a net loss of $3,430,636 for the year ended December 31, 2009. The Partnership’s net asset value per Unit decreased from $17.50 at December 31, 2008, to $15.23 at December 31, 2009. Total redemptions for the year was $7,137,489, and the Partnership’s ending capital was $19,809,350 at December 31, 2009, a decrease of $10,568,125 from ending capital at December 31, 2008, of $30,377,475.

December 31, 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	270,741	–	n/a	270,741
Forwards	–	70,236	n/a	70,236

Total Assets	270,741	70,236	n/a	340,977

Liabilities
Futures	195,393	–	n/a	195,393
Forwards	–	40,258	n/a	40,258
Options Written	22,859	–	n/a	22,859

Total Liabilities	218,252	40,258	n/a	258,510

Unrealized currency gain				876,453

*Net fair value	52,489	29,978	n/a	958,920

~~The~~- ~~most significant~~53 trading losses of approximately 2.8% were incurred within the energy markets primarily during March, April, May, and July from short futures positions in crude oil and its related products as prices moved higher amid positive economic data, which spurred optimism that energy demand might rebound. Additional losses were recorded during October from newly established long futures positions in crude oil and its related products as prices reversed lower after government reports showed U.S. consumer spending dropped for the first time in seven months. Losses of approximately 2.7% were experienced in the currency sector primarily during February, March, May, July, and August from short positions in the euro and Mexican peso versus the U.S. dollar as the value of the U.S. dollar moved lower against most of its rivals after a government report showed U.S. employers cut fewer jobs than forecast, -

- 45 -

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

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

~~which~~During ~~reduced demand for~~ the ~~U.S.~~twelve ~~dollar~~months asended aDecember ~~“safe haven” currency. Additional losses were incurred~~31, ~~primarily~~2012 ~~during January~~ and ~~April~~2011, ~~from~~there ~~long positions in the euro versus the Canadian dollar as the value of the Canadian dollar moved higher on strength in the commodity markets. Losses of approximately 2.0%~~ were ~~incurred~~no ~~within~~Level ~~the~~3 ~~agricultural~~assets ~~complex primarily during March~~ and ~~June~~liabilities ~~from short futures positions in coffee~~ and ~~feeder~~there ~~cattle~~were asno ~~prices~~transfers ~~rose on speculation that government bailouts might help revive the world economy and boost demand for these commodities. Coffee prices continued to move higher throughout a majority~~ of ~~the~~assets ~~third~~or ~~quarter~~liabilities onbetween ~~speculation that~~Level ~~adverse~~1 ~~weather in Colombia~~ and ~~Brazil~~Level might disrupt harvests and tighten supplies, thus resulting in losses for short positions. Further losses in the agricultural complex resulted from long and short futures positions in soybeans as prices moved without consistent direction during July, August, September, and October amid conflicting reports regarding supply and demand. Within the global interest rate sector, losses of approximately 2.0% were experienced primarily during January from long positions in U.S. and European fixed-income futures as prices dropped following news that debt sales might increase as governments around the world boosted spending in an effort to ease the deepening economic slump. Additional losses were incurred during April and June from long positions in U.S. and European fixed-income futures as prices moved lower after a pledge from Group of G-20 leaders to support the global economy reduced demand for the relative “safety” of government bonds. Further losses were experienced during December from long positions in U.S., European, and Australian fixed-income futures as prices fell sharply amid concern that an unprecedented supply of government bonds might outweigh demand as governments around the world were issuing record amounts of debt to finance economic stimulus measures. Lastly, losses of approximately 0.4% were recorded in the metals sector throughout a majority of the first half of the year from short futures positions in aluminum and tin as prices reversed higher on speculation that economic stimulus plans in the U.S. and

-Derivatives 46and - Hedging

~~Table~~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 ~~Contents~~contracts outstanding in absolute quantity (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.

China would help boost demand for base metals. Additional losses were incurred in the metals sector, primarily during December, from short positions in nickel futures as prices rose on speculation that demand in China and the U.S., the world’s biggest purchasers of base metals, might strengthen as the global economy continued to improve. A portion of the Partnership’s overall losses for the year was offset by gains of approximately 1.8% in the global stock index sector throughout a majority of the second half of the year from long positions in European, U.S., and Pacific Rim equity index futures as prices moved higher due to positive corporate earnings reports, stronger-~~than-expected~~ ~~economic~~54 ~~data, and optimism that the global economy might be stabilizing.~~ -

~~For~~As ~~an analysis~~ of ~~unrealized~~ ~~gains~~December ~~and~~31, ~~(losses)~~2012, byapproximately ~~contract~~59.16% ~~type and a further description~~ of ~~2011 trading results, refer to~~ the Partnership’s ~~Annual~~total ~~Report~~investments toare ~~Limited~~futures ~~Partners~~contracts ~~for the year ended December 31, 2011,~~ which isare ~~incorporated~~exchange-traded bywhile ~~reference~~approximately ~~to Exhibit 13~~40.0184% ofare ~~this~~forward ~~Form~~contracts 10which are off-K.exchange traded.

The following tables summarize the valuation of the Partnership’s ~~gains~~investments ~~and~~as ~~losses~~of ~~are~~December ~~allocated~~31, ~~among~~2012 ~~its~~and ~~partners~~2011, ~~for income tax purposes~~respectively.

~~Off-Balance~~The ~~Sheet~~Effect ~~Arrangements~~of ~~and~~Trading ~~Contractual~~Activities ~~Obligations.~~on the Statements of Financial Condition as of December 31, 2012:

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.

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 year (absolute quantity)
	$	$	$	$	$

Commodity	15,953	(74,679)	34,996	(23,285)	(47,015)	195
Equity	51,479	(8,381)	15,186	(15,625)	42,659	46
Foreign currency	125,101	(46,320)	53,721	(28,930)	103,572	892
Interest rate	44,541	(18,952)	–	(19,479)	6,110	405
Total	237,074	(148,332)	103,903	(87,319)	105,326

Unrealized currency gain					876,453
Total net unrealized gain on open contracts					981,779

Market Risk.

		Average number of contracts outstanding
		for the year
Option Contracts at Fair Value	$	(absolute quantity)
Options purchased	–	1
Options written	(22,859)	14

~~The Partnership is a party to financial instruments with elements of off~~-~~balance~~ ~~sheet~~55 ~~market and credit risk. The Partnership trades futures contracts, options on futures and forward contracts, and forward contracts on~~ -

-The 47Effect - 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

physical commodities and other commodity interests, including, but not limited to, foreign currencies, financial instruments, metals, energy, and agricultural products. In entering into these contracts, the Partnership is subject to the market risk that such contracts may be significantly influenced by market conditions, such as interest rate volatility, resulting in such contracts being less valuable. If the markets should move against all of the positions held by the Partnership at the same time, and the Trading Advisors were unable to offset positions of the Partnership, the Partnership could lose all of its assets and the limited partners would realize a loss equal to 100% of their capital accounts.

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

InThe ~~addition~~following totables ~~the~~summarize ~~Trading Advisors’ internal controls,~~ the ~~Trading~~net ~~Advisors~~trading ~~must~~results ~~comply~~of ~~with~~ the Partnership’s ~~trading policies that include standards~~ for ~~liquidity and leverage that must be maintained. The Trading Advisors and Ceres monitor~~ the ~~Partnership’s~~years ~~trading~~ended ~~activities~~December to31, ~~ensure~~2012, ~~compliance~~2011, ~~with the trading policies~~ and ~~Ceres~~ ~~can~~2010, ~~require the Trading Advisors to modify positions of the Partnership if Ceres believes they violate the Partnership’s trading policies~~respectively.

~~Credit~~The ~~Risk.~~Effect of Trading Activities on the Statements of Income and Expenses for the years ended December 31, 2012, 2011, and 2010, included in Total Trading Results:

In December ~~addition to market risk~~31, in entering into futures, forward, and options contracts, there is a credit risk to the Partnership that the counterparty on a contract will not be able to meet its obligations to the Partnership. The ultimate counterparty or guarantor of the Partnership for futures, forward and options contracts traded in the United States and most foreign exchanges on which the Partnership trades is the clearinghouse associated with such exchange. In general, a clearinghouse is backed by the membership of the exchange and will act in the event of non-performance by one of its members or one of its member’s customers, which should significantly reduce this credit risk. There is no assurance that a clearinghouse, exchange, or other exchange

- 48 -

	2012	2011	2010
Type of Instrument	$	$	$
Commodity	(261,829)	(864,562)	176,977
Equity	224,150	(965,779)	(119,010)
Foreign currency	171,401	(735,607)	1,416,646
Interest rate	6,538	1,137,203	2,032,378
Unrealized currency loss	(18,409)	(61,781)	(34,349)
Proceeds from Litigation	–	–	29,602
Total	121,851	(1,490,526)	3,502,244

~~Table~~- of56 ~~Contents~~-

~~member~~Line ~~will~~Items ~~meet~~on ~~its obligations to~~ the ~~Partnership,~~Statements ~~and~~of ~~Ceres~~Income and ~~the~~Expenses ~~commodity~~for ~~brokers will not indemnify~~ the ~~Partnership~~years ~~against~~ended aDecember 31, ~~default by such parties. Further~~2012, the law is unclear as to whether a commodity broker has any obligation to protect its customers from loss in the event of an exchange or clearinghouse defaulting on trades effected for the broker’s customers. In cases where the Partnership trades off-exchange forward contracts with a counterparty2011, ~~the~~and ~~sole recourse of the Partnership will be the forward contract’s counterparty.~~ 2010:

~~Ceres deals~~ December ~~with these credit risks of the Partnership in several ways. First~~31, Ceres monitors the Partnership’s credit exposure to each exchange on a daily basis. The commodity brokers inform the Partnership, as with all of their customers, of the Partnership’s net margin requirements for all of its existing open positions, and Ceres has installed a system which permits it to monitor the Partnership’s potential net credit exposure, exchange by exchange, by adding the unrealized trading gains on each exchange, if any, to the Partnership’s margin liability thereon.

Second, the Partnership’s trading policies limit the amount of its net assets that can be committed at any given time to futures contracts and require a minimum amount of diversification in the Partnership’s trading, usually over several different products and exchanges. Historically, the Partnership’s exposure to any one exchange has typically amounted to only a small percentage of its total net assets and on those relatively few occasions where the Partnership’s credit exposure climbs above such level, Ceres deals with the situation on a case by case basis, carefully weighing whether the increased level of credit exposure remains appropriate. Material changes to the trading policies may be made only with the prior written approval of the limited partners owning more than 50% of Units then outstanding.

	2012	2011	2010
Trading Results	$	$	$
Net realized	370,013	(1,151,478)	3,283,491
Net change in unrealized	(248,162)	(339,048)	189,151
Proceeds from Litigation	–	–	29,602
Total	121,851	(1,490,526)	3,502,244

-Other ~~49 -~~ Pronouncements

~~Table~~On October 1, 2012, the FASB issued ASU 2012-04, “Technical Corrections and Improvements”, which makes minor technical corrections and clarifications to Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures”. When the FASB issued Statement 157 (codified in ASC 820), it conformed the use of ~~Contents~~the term “fair value” in certain pre-Codification standards but not others. ASU 2012-04 conforms the term’s use throughout the ASC “to fully reflect the fair value measurement and disclosure requirements” of ASC 820. The ASU also amends the requirements that must be met for an investment company to qualify for the exemption from presenting a statement of cash flows. Specifically, it eliminates the requirements that substantially all of an entity’s investments be carried at “market value” and that the investments be highly liquid. Instead, it requires substantially all of the entity’s investments to be carried at “fair value” and classified as Level 1 or Level 2 measurements under ASC 820. The amendments are effective for fiscal periods beginning

~~Third,~~after ~~with~~December ~~respect to forward and options on forward contract trading~~15, ~~the Partnership trades with only those counterparties which Ceres, together with MS&Co~~2012., ~~has determined to be creditworthy.~~ The ~~Partnership~~adoption ~~presently deals with MS&Co. as the sole counterparty on all trading~~ of ~~foreign~~this ~~currency~~ASU ~~forward~~will ~~contracts~~not ~~and~~have ~~MSCG~~a ~~as the~~significant ~~sole~~impact ~~counterparty~~ on ~~all~~the ~~trading~~Partnership’s offinancial ~~options on foreign currency forward contracts~~statements.

~~For~~In ~~additional~~December ~~information~~2011, ~~see~~ the ~~“Financial~~ ~~Instruments”~~FASB ~~section~~issued ~~under~~ASU 2011-11, “~~Notes~~Disclosures toabout ~~Financial~~Offsetting ~~Statements”~~Assets inand ~~the~~Liabilities”, ~~Partnership’s~~which ~~Annual~~creates ~~Report~~a tonew ~~Limited~~disclosure ~~Partners~~requirement ~~for~~about the ~~year~~nature ~~ended~~of ~~December 31,~~an ~~2011,~~entity’s ~~which~~rights isof ~~incorporated~~setoff byand ~~reference~~the torelated ~~Exhibit~~arrangements ~~13.01~~associated ~~of this~~with ~~Form~~its ~~10-K.~~financial instruments and derivative instruments.

~~Inflation~~- ~~has~~57 ~~not been a major factor in the Partnership’s operations.~~ -

~~Fair~~Subsequently ~~Value~~in ~~Measurements~~January ~~and~~2013, the FASB issued ASU 2013-01, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”, which clarifies the types of instruments and transactions that are subject to the offsetting disclosure requirements established by ASU 2011-11. Entities are required to disclose both gross information and net information about both instruments and 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 these disclosures 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 would also provide the disclosures retrospectively for all comparative periods presented. The Partnership is currently evaluating the impact that these pronouncements would have on the financial statements.

~~Financial~~In ~~instruments~~October ~~are~~2011, ~~carried~~the atFASB ~~fair~~issued ~~value,~~a ~~which~~proposed isASU ~~the~~intended ~~price~~to ~~that~~improve ~~would~~and beconverge ~~received~~financial toreporting ~~sell~~by ansetting ~~asset~~forth orconsistent ~~paid~~criteria tofor ~~transfer~~determining awhether ~~liability in~~ an ~~orderly~~entity ~~transaction~~is ~~between~~an ~~market~~investment ~~participants~~company. Under ~~Assets and~~longstanding ~~liabilities~~U.S. ~~carried~~GAAP, atinvestment ~~fair~~companies ~~value~~carry ~~are~~all ~~classified~~of ~~and~~their ~~disclosed~~investments inat ~~the~~fair ~~following~~value, ~~three~~even ~~levels:~~if ~~Level~~they 1hold –a ~~unadjusted~~controlling ~~quoted~~interest ~~market prices~~ in ~~active~~another ~~markets~~company. The ~~for~~primary ~~identical~~changes ~~assets~~being ~~and~~proposed ~~liabilities;~~by ~~Level~~the 2FASB –relate ~~inputs~~to ~~other~~which ~~than~~entities ~~unadjusted quoted~~would ~~market~~be ~~prices~~considered ~~that~~investment ~~are~~companies ~~observable~~as ~~for~~well ~~the~~as ~~asset~~certain ordisclosure ~~liability,~~and ~~either~~presentation ~~directly~~requirements. In oraddition ~~indirectly~~to ~~(including~~the ~~quoted~~changes ~~market~~to ~~prices~~the criteria for ~~similar~~determining ~~investments,~~whether ~~interest~~an ~~rates,~~entity ~~and~~is ~~credit~~an ~~risk);~~investment ~~and~~company, ~~Level~~the 3FASB –also ~~unobservable~~proposes ~~inputs~~that ~~for~~an ~~the~~investment ~~asset~~company ~~or liability~~would ~~(including~~be ~~the~~required ~~Partnership’s~~to ~~own~~consolidate ~~assumptions~~another ~~used~~investment incompany ~~determining~~if ~~the~~it ~~fair~~holds ~~value~~a ~~of investments).~~ controlling

- 5058 -

~~Table~~financial interest in the entity. In August 2012, the FASB updated the proposed ASU to state that entities regulated under Investment Company Act of ~~Contents~~1940 should qualify to be investment companies within the proposed investment company guide. The Partnership will evaluate the impact that this proposed update would have on the financial statements once the pronouncement is issued.

InSubsequent 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. Events

~~The~~Management ~~Partnership’s~~of ~~assets~~Ceres ~~and~~performed ~~liabilities~~its ~~measured~~evaluation atof ~~fair~~subsequent ~~value~~events onand ahas ~~recurring~~determined ~~basis~~that ~~are~~there ~~summarized~~were inno ~~the~~subsequent ~~following~~events ~~tables~~requiring byadjustment ~~the type~~ of ~~inputs~~or ~~applicable~~disclosure toin the ~~fair~~financial ~~value measurements~~statements.

December 31, 2011	UnadjustedQuoted Prices inActive Marketsfor IdenticalAssets(Level 1)		SignificantOtherObservableInputs (Level 2)			SignificantUnobservableInputs(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

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~- 51 -~~ Introduction

~~Table~~The Partnership is a commodity pool engaged primarily in the speculative trading of ~~Contents~~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.

December 31, 2010	UnadjustedQuoted Prices inActive Marketsfor IdenticalAssets(Level 1)		SignificantOtherObservableInputs (Level 2)		SignificantUnobservableInputs(Level 3)		Total
	$		$		$		$
Assets
Futures		980,403		—		n/a		980,403
Forwards		—		116,589		n/a		116,589
Options Purchased		—		2,701		n/a		2,701
Total Assets		980,403		119,290		n/a		1,099,693
Liabilities
Futures		443,954		—		n/a		443,954
Forwards		—		53,187		n/a		53,187
Total Liabilities		443,954		53,187		n/a		497,141
Unrealized currency gain								957,706
*Net fair value		536,449		66,103		n/a		1,560,258

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

* This amount comprises of the “Total net unrealized, ~~gain~~and oncash ~~open~~flow. Gains ~~contracts”~~ and ~~options~~losses ~~purchased~~ on ~~the~~open ~~Statements~~positions of ~~Financial~~exchange-traded ~~Condition.~~futures, exchange-traded

~~Derivatives~~- ~~and~~59 ~~Hedging~~ -

~~The Partnership’s objective is to profit from speculative trading in Futures Interests. Therefore~~forward, ~~the~~and ~~Trading~~exchange-traded ~~Advisors~~futures-styled ~~for~~options ~~the~~contracts ~~Partnership~~are ~~will~~settled ~~take~~daily ~~speculative~~through ~~positions~~variation ~~in Futures Interests where they feel the best profit opportunities exist for their trading strategy~~margin. Gains Asand ~~such,~~losses ~~the~~on ~~average~~off-exchange-traded ~~number~~forward ofcurrency contracts ~~outstanding in absolute quantity (the total of the open long~~ and ~~open~~forward ~~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~~options ~~trades, each notional quantity amount has been converted to an equivalent contract based upon an industry convention.~~ contracts

-are 52settled upon termination of the contract. Gains and losses on off- exchange-traded forward currency options contracts are settled upon an agreed upon settlement date.

~~Table~~The Partnership’s total market risk may increase or decrease as it is influenced by a wide variety of ~~Contents~~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.

AsThe face value of ~~December 31,~~the ~~2011,~~market ~~approximately~~sector ~~72.8%~~instruments ofheld by the Partnership’s ~~total investments~~is ~~are~~typically ~~futures~~many ~~contracts~~times ~~which~~the ~~are~~applicable ~~exchange-traded~~margin ~~while~~requirements. Margin ~~approximately~~requirements ~~27.~~generally range between 2% ~~are~~and ~~forward~~15% ~~contracts~~of ~~which~~contract ~~are~~face ~~off-exchange traded~~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.

The ~~following~~Partnership’s ~~tables~~past ~~summarize~~performance ~~the~~is ~~valuation~~no guarantee of its future results. Any attempt to numerically quantify the Partnership’s ~~investments~~market asrisk is limited by the uncertainty of ~~December 31,~~its ~~2011~~speculative trading. The Partnership’s speculative trading and ~~2010,~~use ~~respectively~~of leverage may cause future losses and volatility (i.e., “risk of ruin”) that far exceed the Partnership’s experience to date under the “Partnership’s Value at Risk in Different Market Sectors” section and significantly exceed the Value at Risk (“VaR”) tables disclosed.

~~The~~Limited ~~Effect~~partners ofwill ~~Trading~~not ~~Activities~~be onliable ~~the~~for ~~Statements~~losses ofexceeding ~~Financial~~the ~~Condition~~current asnet ofasset ~~December 31,~~value ~~2011:~~of their investment.

Futures and Forward Contracts	LongUnrealizedGain		LongUnrealizedLoss			ShortUnrealizedGain		ShortUnrealizedLoss			NetUnrealizedGain		Averagenumber ofcontractsoutstandingfor the year(absolutequantity)
	$		$			$		$			$
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

- 60 -

-Quantifying 53the - Partnership’s Trading Value at Risk

~~Table~~The following quantitative disclosures regarding the Partnership’s market risk exposures contain “forward-looking statements” within the meaning of ~~Contents~~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

Option Contracts at Fair Value	$		Average number ofcontracts outstandingfor the year(absolute quantity)
Options purchased		814		1
Options written		—		1

deemed to be forward-looking statements for purposes of the safe harbor, except for statements of historical fact.

The ~~Effect~~Partnership ofaccounts ~~Trading~~for ~~Activities~~open positions on the ~~Statements~~basis of ~~Financial~~fair ~~Condition~~value asaccounting principles. Any loss in the market value of ~~December 31,~~the ~~2010:~~ Partnership’s open positions is directly reflected in the Partnership’s earnings and cash flow.

Futures and Forward Contracts	LongUnrealizedGain		LongUnrealizedLoss			ShortUnrealizedGain		ShortUnrealizedLoss			NetUnrealizedGain		Averagenumber ofcontractsoutstandingfor the year(absolutequantity)
	$		$			$		$			$
Commodity		572,508		(74,894	)		1,700		(282,491	)		216,823		364
Equity		19,806		(16,315	)		14,244		(9,282	)		8,453		54
Foreign currency		202,991		(31,548	)		222,394		(39,617	)		354,220		1,998
Interest rate		61,518		(13,756	)		1,842		(29,249	)		20,355		417
Total		856,823		(136,513	)		240,180		(360,639	)		599,851
Unrealized currency gain												957,706
Total net unrealized gain on open contracts												1,557,557

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

Option Contracts at Fair Value	$		Average number ofcontracts outstandingfor the year(absolute quantity)
Options purchased		2,701		2
Options written		—		1

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.

~~The~~- ~~following~~61 ~~tables summarize the net trading results of the Partnership for the years ended December 31, 2011, 2010 and 2009, respectively.~~ -

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% - 5499% 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.

~~Table~~The ofPartnership’s ~~Contents~~Value at Risk in Different Market Sectors

The ~~Effect~~following oftables ~~Trading~~indicate ~~Activities~~the ontrading VaR associated with the ~~Statements~~Partnership’s open positions by market category as of ~~Income~~December 31, 2012 and ~~Expenses~~2011 ~~for~~and the ~~year~~highest, lowest and average values during the twelve months ended December 31, 2012 and 2011. All open position trading risk exposure of the Partnership have been included in ~~Total~~calculating ~~Trading~~the ~~Results:~~figures set forth below.

Type of Instrument	$
Commodity		(864,562	)
Equity		(965,779	)
Foreign currency		(735,607	)
Interest rate		1,137,203
Unrealized currency loss		(61,781	)
Total		(1,490,526	)

As of December 31, 2012, the Partnership’s total capitalization was approximately $11 million.

~~Line Items on the Statements of Income and Expenses for the year ended~~ December 31, ~~2011:~~ 2012

Trading Results		$
Primary Market		% of
Net Realized			(1,151,478	)
Risk Category	VaR	Total Capitalization
Net change in unrealized			(339,048	)
Currency	$763,363	6.88%
Total Trading Results			(1,490,526	)
Interest Rate	279,895	2.52%
Equity	220,060	1.98%
Commodity	256,920	2.32%
Total	$1,520,238	13.70%

~~The~~- ~~Effect~~62 ~~of Trading Activities on the Statements of Income and Expenses for the year ended December 31, 2010 included in Total Trading Results:~~ -

Type of Instrument	$
Commodity		176,977
Equity		(119,010	)
Foreign currency		1,416,646
Interest rate		2,032,378
Unrealized currency loss		(34,349	)
Proceeds from Litigation		29,602
Total		3,502,244

Twelve Months Ended December 31, 2012

Line Items on the Statements of Income and Expenses for the year ended December 31, 2010:

Market Sector	High VaR	Low VaR	Average VaR*
Currency	$1,052,602	$349,709	$614,261
Interest Rate	$386,693	$178,106	$284,830
Equity	$254,758	$104,401	$181,818
Commodity	$506,740	$193,941	$374,444
*Average of month-end VaR.

Trading Results	$
Net Realized		3,283,491
Net change in unrealized		189,151
Proceeds from Litigation		29,602
Total Trading Results		3,502,244

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

- December 5531, - 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%

~~The~~ Twelve ~~Effect~~Months ofEnded ~~Trading Activities on the Statements of Income and Expenses for the year ended~~ December 31, ~~2009 included in Total Trading Results:~~ 2011

Type of Instrument		$
Market Sector	High VaR	Low VaR	Average VaR*
Commodity			(1,244,194	)
Currency	$1,897,024	$140,764	$452,072
Equity			303,714
Interest Rate	$524,034	$111,250	$201,138
Foreign currency			(756,331	)
Equity	$432,915	$47,306	$98,639
Interest rate			(608,998	)
Commodity	$578,250	$59,025	$267,371
Unrealized currency gain			314,542
*Average of month-end VaR.
Total			(1,991,267	)

~~Line~~- ~~Items~~63 ~~on the Statements of Income and Expenses for the year ended December 31, 2009:~~ -

Trading Results	$
Net Realized		(451,631	)
Net change in unrealized		(1,539,636	)
Total Trading Results		(1,991,267	)

Limitations on Value at Risk as an Assessment of Market Risk

~~Other~~VaR ~~Pronouncements~~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:

In· ~~December~~past ~~2011,~~changes ~~the~~in ~~Financial~~market ~~Accounting~~risk ~~Standards~~factors ~~Board~~will ~~(“FASB”)~~not ~~issued~~always ~~Accounting~~result Standards Update (“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 transactions eligible for offset in ~~the~~accurate ~~statement~~predictions 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~~distributions ~~of U.S. GAAP~~ and ~~those~~correlations ~~entities that prepare their financial statements on the basis~~ of ~~International~~future ~~Financial Reporting~~market Standards (“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.movements;

-· 56changes - in portfolio value caused by market movements may differ from those of the VaR model;

~~Table~~· ofVaR ~~Contents~~results reflect past market fluctuations applied to current trading positions while future risk depends on future positions;

In· ~~October~~VaR ~~2011,~~using ~~the FASB issued~~ a ~~proposed~~one-day ~~ASU~~time ~~intended~~horizon todoes ~~improve~~not ~~and~~fully ~~converge~~capture ~~financial reporting~~the bymarket ~~setting~~risk ~~forth consistent criteria for determining whether an entity is an investment company. Under longstanding U.S. GAAP, investment companies carry all~~ of ~~their~~positions ~~investments~~that atcannot ~~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~~liquidated ~~investment~~or ~~companies~~hedged aswithin ~~well~~one asday; ~~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 consolidate another investment company if it holds a controlling financial interest in the entity. The Partnership will evaluate the impact that this proposed update would have on the financial statements once the pronouncement is issued.

In· ~~May 2011,~~ the ~~FASB~~historical ~~issued~~market ~~ASU 2011-04,~~risk ~~“Amendments~~factor todata ~~Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS.” The amendments within this ASU change the wording~~ used ~~to describe many of the requirements in U.S. GAAP~~ for ~~measuring fair~~VaR ~~value~~estimation ~~and~~may ~~for~~provide ~~disclosing~~only ~~information~~limited ~~about~~insight ~~fair~~into ~~value~~losses ~~measurements~~that tocould ~~eliminate~~be ~~unnecessary~~incurred ~~wording~~under ~~differences~~certain ~~between~~unusual ~~U.S.~~market ~~GAAP and IFRS~~movements. 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. The ASU is effective for annual and interim periods beginning after December 15, 2011 for public entities. This new guidance is not expected to have a material impact on the Partnership’s financial statements.

Non-Trading ~~57 -~~ Risk

~~Table~~The ofPartnership ~~Contents~~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.

~~Subsequent~~A ~~Events~~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.

~~Management~~- ~~performed~~64 ~~its evaluation of subsequent events and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.~~ -

~~Item 7A.~~Materiality, ~~QUANTITATIVE~~as ~~AND~~used ~~QUALITATIVE~~throughout ~~DISCLOSURES~~this ~~ABOUT~~section, ~~MARKET RISK~~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.

~~Introduction~~Qualitative Disclosures Regarding Primary Trading Risk Exposures

The following qualitative disclosures regarding the Partnership’s ismarket arisk ~~commodity~~exposures ~~pool~~– ~~engaged~~except ~~primarily~~for in(A) those disclosures that are statements of historical fact and (B) the ~~speculative~~descriptions ~~trading~~of how the Partnership manages its primary market risk exposures – constitute forward-looking statements within the meaning of ~~futures,~~Section ~~forwards~~27A of the Securities Act and ~~options.~~Section 21E of the Securities Exchange Act. The Partnership’s primary market~~-sensitive~~ ~~instruments~~risk ~~held~~exposures, as well as the strategies used and to be used by Ceres and the ~~Partnership~~Trading Advisors for managing such exposures, are ~~acquired~~subject ~~for~~to ~~speculative trading~~numerous ~~purposes~~uncertainties, ~~only~~contingencies and risks, asany aone ~~result,~~of ~~all~~which orcould ~~substantially~~cause ~~all~~the actual results of the Partnership’s ~~assets~~risk ~~are~~controls atto ~~risk~~differ materially from the objectives of ~~trading~~such ~~loss~~strategies. Government ~~Unlike~~interventions, andefaults ~~operating~~and ~~company~~expropriations, illiquid markets, the ~~risk~~emergence of dominant fundamental factors, political upheavals, changes in historical price relationships, an influx of new market~~-sensitive~~ ~~instruments~~participants, isincreased ~~inherent~~regulation, and many other factors could result in material losses, as well as in material changes to the ~~primary~~risk ~~business~~exposures ~~activity~~and the risk management strategies of the Partnership. Investors must be prepared to lose all or substantially all of their investment in the Partnership.

The ~~futures~~Trading Advisors, ~~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~~general, ~~exchange~~tend ~~rates,~~to ~~and~~utilize ~~prices~~trading ~~of financial instruments and commodities, factors that result in frequent changes in the fair value of the Partnership’~~system(s) ~~open~~to ~~positions,~~take ~~and consequently in its earnings, whether realized or unrealized, and cash flow. Gains and losses on open~~ positions ofwhen ~~exchange-traded~~market ~~futures,~~opportunities ~~exchange-traded forward~~develop, and ~~exchange-traded~~Ceres ~~futures-styled~~anticipates ~~options contracts~~that ~~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.~~Trading ~~Gains~~Advisors ~~and~~will ~~losses~~continue ~~on off-exchange-traded forward currency options contracts are settled upon an agreed upon settlement date. However, the Partnership is required~~ to ~~meet~~do 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&Coso.

- 5865 -

~~Table~~The following were the primary trading risk exposures of ~~Contents~~the Partnership at December 31, 2012 by market sector. It may be anticipated, however, that these market exposures will vary materially over time.

Currencies. The Partnership’s ~~total~~currency ~~market~~exposure ~~risk~~is ~~may~~to ~~increase~~exchange orrate ~~decrease~~fluctuations, asprimarily itfluctuations iswhich disrupt the historical pricing relationships between different currencies and currency pairs. These fluctuations are influenced by ~~a wide~~interest ~~variety~~rate ofchanges ~~factors,~~as ~~including,~~well ~~but~~as ~~not~~political ~~limited~~and ~~to,~~general ~~the~~economic ~~diversification~~conditions. ~~among~~The ~~the~~General ~~Partnership’s~~Partner ~~open~~does ~~positions,~~not anticipate that the ~~volatility~~risk ~~present~~profile ~~within~~of the ~~markets,~~Partnership’s ~~and~~currency ~~the~~sector ~~liquidity~~will ofchange significantly in the ~~markets~~future.

~~The~~Interest ~~face~~Rates. Interest ~~value~~rate ofmovements directly affect the ~~market~~price ~~sector~~of ~~instruments~~the futures positions held by the Partnership isand ~~typically~~indirectly ~~many~~the ~~times~~value ~~the~~of ~~applicable~~its ~~margin~~stock ~~requirements~~index and currency positions. ~~Margin~~ ~~requirements~~Interest ~~generally~~rate ~~range~~movements ~~between~~in 2%one ~~and~~country ~~15%~~as ofwell ~~contract~~as ~~face~~relative ~~value.~~interest ~~Additionally,~~rate ~~the~~movements ~~use~~between ofcountries ~~leverage~~materially ~~causes~~impact the ~~face~~Partnership’s ~~value~~profitability. ofThe Partnership’s primary interest rate exposure is to interest rate fluctuations in the ~~market~~United ~~sector~~States ~~instruments~~and ~~held~~the byother G-8 countries. However, the Partnership/Funds ~~typically~~also totake befutures ~~many~~positions ~~times~~on the ~~total~~government ~~capitalization~~debt of ~~the~~ ~~Partnership~~smaller nations — e.g., Australia and New Zealand.

Equities. The Partnership’s ~~past~~primary ~~performance~~equity exposure is noto ~~guarantee~~equity ofprice ~~its~~risk ~~future~~in ~~results~~the G-8 countries. ~~Any~~The ~~attempt~~stock toindex ~~numerically quantify~~futures traded by the Partnership’s ~~market~~are ~~risk~~limited isto ~~limited~~futures byon ~~the~~broadly ~~uncertainty~~based indices. As of ~~its~~December ~~speculative~~31, ~~trading.~~2012 ~~The~~the Partnership’s ~~speculative~~primary ~~trading~~exposures ~~and~~were ~~use~~in ofthe ~~leverage~~S&P ~~may~~500 ~~cause~~(U.S.), ~~future~~TOPIX ~~losses~~(Japan), ~~and~~AOI ~~volatility~~ (~~i.e.,~~Australia) ~~“risk~~and ofDAX ~~ruin”~~(Germany) ~~that far~~stock ~~exceed~~indices. ~~the~~The Partnership’s ~~experience~~is toprimarily ~~date~~exposed ~~under~~to the ~~“Partnership’s~~risk ~~Value~~of atadverse ~~Risk~~price intrends ~~Different~~or ~~Market~~static ~~Sectors”~~markets ~~section~~in ~~and~~the ~~significantly~~major ~~exceed~~European, ~~the~~Pacific ~~Value~~Rim, atand ~~Risk~~North ~~(“VaR”)~~American ~~tables disclosed~~indices. (Static

~~Limited~~- ~~partners~~66 ~~will not be liable for losses exceeding the current net asset value of their investment.~~ -

~~Quantifying~~markets would not cause major market changes but would make it difficult for the Partnership’s ~~Trading~~to ~~Value~~avoid atbeing ~~Risk~~“whipsawed” into numerous small losses.)

~~The following quantitative disclosures regarding the Partnership’s market risk exposures contain “forward-~~ Commodities.

-Energy. The 59Partnership’s - primary energy market exposure is to natural gas and oil price movements, often resulting from political developments in the Middle East and weather conditions. Energy prices can be volatile and substantial profits and losses, which have been experienced in the past, are expected to continue to be experienced in these markets in the future.

~~Table~~Metals. The Partnership’s primary metal market exposure as of ~~Contents~~December 31, 2012 was to fluctuations in the price of copper, nickel, zinc, lead and gold.

~~looking~~Softs. The ~~statements”~~Partnership’s ~~within~~trading ~~the~~risk ~~meaning~~exposure ofin the ~~safe~~soft ~~harbor~~commodities ~~from~~is ~~civil~~to ~~liability~~agricultural-related ~~provided~~price ~~for~~movements ~~such~~which ~~statements~~are byoften ~~the~~directly ~~Private~~affected ~~Securities~~by ~~Litigation~~severe ~~Reform~~or ~~Act~~unexpected ofweather ~~1995~~conditions. ~~(set~~Sugar, ~~forth~~cocoa ~~in Section 27A~~and ofcotton ~~the~~accounted ~~Securities~~for ~~Act~~the ofmajority ~~1933 and Section 21E~~ of the ~~Securities~~Partnership’s ~~Exchange~~soft ~~Act~~commodities ofexposure ~~1934).~~as ~~All quantitative disclosures in this section are deemed to be forward-looking statements for purposes~~ of ~~the~~December ~~safe harbor~~31, ~~except for statements of historical fact~~2012.

Grains. The Partnership’s ~~accounts~~trading ~~for~~risk ~~open~~exposure ~~positions~~in on the ~~basis~~grains ofis ~~fair~~primarily ~~value~~to ~~accounting~~agricultural ~~principles. Any~~price ~~loss~~movements inwhich ~~the~~are ~~market~~often ~~value~~directly ofaffected by severe or unexpected weather conditions. Wheat, the ~~Partnership’s~~soybean ~~open~~complex, ~~positions~~and iscorn ~~directly~~accounted ~~reflected~~for inthe majority of the Partnership’s ~~earnings~~grain ~~and~~exposure ~~cash~~as ~~flow.~~of December 31, 2012.

The Partnership’s risk exposure in the market sectors traded by the Trading Advisors is estimated below in terms of VaR. Prior to June 30, 2011, the Partnership estimated VaR using a model based upon historical simulation (with a confidence level of 99%) which involved constructing a distribution of hypothetical daily changes in the value of a trading portfolio. The VaR model took into account linear exposures to risks including equity and commodity prices, interest rates, foreign exchange rates, and correlation among these variables. The hypothetical changes in portfolio value were based on daily percentage changes observed in key market indices or other market factors (“market risk factors”) to which the portfolio was sensitive. The one-~~day~~ ~~99%~~67 confidence level of the Partnership’s VaR corresponded to the negative change in portfolio value that, based on observed market risk factors, would have been exceeded once in 100 trading days, or one day in 100. VaR typically does not represent the worst case outcome. Ceres used approximately four years of daily market data (1,000 observations) and re-~~valued its portfolio (using delta-gamma~~

-Livestock. 60The - Partnership’s primary risk exposure in livestock is to fluctuations in cattle and lean hog prices.

~~Table~~Qualitative Disclosures Regarding Means of ~~Contents~~Managing Risk Exposure

~~approximations)~~The ~~for~~Partnership ~~each~~and the Trading Advisors, separately, attempt to manage the risk of the ~~historical~~Partnership’s ~~market~~open ~~moves~~positions ~~that~~in ~~occurred~~essentially ~~over~~the ~~this~~same ~~time~~manner ~~period~~in all market categories traded. Ceres ~~This~~attempts ~~generated~~to amanage ~~probability~~market ~~distribution~~exposure ofby ~~daily~~diversifying ~~“simulated~~the ~~profit~~Partnership’s ~~and~~assets ~~loss”~~among ~~outcomes.~~different ~~The VaR~~market issectors ~~the~~and ~~appropriate~~trading ~~percentile~~approaches through the selection of ~~this~~commodity ~~distribution.~~trading ~~For~~advisors ~~example~~and by daily monitoring their performance. In addition, the ~~99%~~Trading ~~one-day~~Advisors ~~VaR~~establish ~~would~~diversification ~~represent~~guidelines, often set in terms of the ~~10th~~maximum ~~worst~~margin ~~outcome~~to ~~from~~be ~~Ceres’~~committed ~~simulated~~to ~~profit~~positions ~~and~~in ~~loss~~any ~~series.~~one market sector or market-sensitive instrument.

~~The~~Ceres ~~Partnership’s~~monitors ~~VaR~~and ~~computations~~controls ~~are based on~~ the risk ~~representation~~ of the ~~underlying~~Partnership’s ~~benchmark for each instrument or contract and do not distinguish between exchange and~~ non-~~exchange~~trading ~~dealer-based~~instrument, ~~instruments~~cash. Cash ~~They~~is ~~are~~the ~~also~~only ~~not~~Partnership ~~based~~investment ondirected ~~exchange~~by ~~and/or~~Ceres, ~~dealer-based~~rather ~~maintenance~~than ~~margin~~the ~~requirements.~~Trading Advisors.

VaR models, including the Partnership’s, are continually evolving as trading portfolios become more diverse and modeling techniques and systems capabilities improve. 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. Please further note that VaR as described above may not be comparable to similarly-~~titled~~ ~~measures~~68 ~~used by other entities.~~ -

~~Starting~~Item ~~with the third quarter 2011, exchange maintenance margin requirements have been used by the Partnership as the measure of its VaR~~8. FINANCIAL ~~Maintenance~~STATEMENTS ~~margin~~AND ~~requirements~~SUPPLEMENTARY 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. DATA

-The 61Financial - Statements are incorporated by reference to the Partnership's Annual Report, which is filed as Exhibit 13.01 hereto.

~~Table~~Supplementary data specified by Item 302 of ~~Contents~~Regulation S-K:

~~The~~Summary ~~Partnership’s~~of ~~Value~~Quarterly atResults ~~Risk in Different Market Sectors~~ (Unaudited)

The following tables indicate the trading VaR associated with the Partnership’s open positions by market category as of December 31, 2011 and the highest, lowest and average values during the twelve months ended December 31, 2011. All open position trading risk exposure of the Partnership have been included in calculating the figures set forth below. As of December 31, 2011 the Partnership’s total capitalization was approximately $14 million.

	Total Trading Results	Net	Net Income/
Quarter Ended	including interest income	Income/(Loss)	(Loss) Per Unit

2012
March 31	$116,257	$(96,250)	$(0.11)
June 30	(103,568)	(303,205)	(0.34)
September 30	337,586	144,391	0.15
December 31	(218,548)	(395,862)	(0.47)

Total	$131,727	$(650,926)	$(0.77)


2011
March 31	$(1,198,698)	$(1,484,693)	$(1.32)
June 30	(532,962)	(791,911)	(0.74)
September 30	524,689	283,582	0.26
December 31	(276,228)	(501,266)	(0.49)

Total	$(1,483,199)	$(2,494,288)	$(2.29)

Primary Market Risk Category	VaR		% ofTotal 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	%

Item 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

	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

None.

*- ~~Average~~69 ~~of month~~-~~end VaR.~~

~~The following~~Item ~~table indicates the VaR associated with the Partnership’s open positions as a percentage of total Partner’s Capital by primary market risk category at December 31, 2010~~9A. CONTROLS AtAND ~~December 31, 2010, the Partnership’s total capitalization was approximately $19 million.~~ PROCEDURES

Under the supervision and with the participation of the management of Ceres, at the time this annual report was filed, 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) 62and 15d- 15(e) of the Exchange Act) as of December 31, 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 December 31, 2012.

~~Table~~Management’s ofReport ~~Contents~~on Internal Control Over Financial Reporting

Primary Market	December 31, 2010
Risk Category	VaR
Currency		(0.73	)%
Interest Rate		(0.37	)
Equity		(0.23	)
Commodity		(1.83	)
Aggregate Value at Risk		(2.08	)%

·	Ceres is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act).

~~The~~Ceres ~~VaR~~has ~~for~~assessed athe ~~market~~effectiveness ~~category~~of ~~represents~~ the ~~one-day~~Partnership’s ~~downside~~internal ~~risk~~control ~~for~~over ~~the~~financial ~~aggregate~~reporting ~~exposures~~as ~~associated with~~of ~~this~~December ~~market~~31, ~~category~~2012. In ~~The~~making ~~Aggregate~~this ~~Value~~assessment, atCeres ~~Risk~~used ~~listed~~the ~~above~~criteria ~~represents~~set forth by the ~~VaR~~Committee of Sponsoring Organizations of the Treadway Commission known as COSO in Internal Control-Integrated Framework. Ceres has concluded that, as of December 31, 2012, the Partnership’s ~~open~~internal ~~positions~~control ~~across~~over ~~all~~financial ~~the~~reporting ~~market~~is ~~categories,~~effective ~~and~~based ison ~~less~~these ~~than~~criteria. This ~~the~~report ~~sum~~shall ofnot ~~the~~be ~~VaRs~~deemed to be filed for ~~all~~purposes ~~such~~of ~~market~~Section ~~categories~~18 ~~due~~of the Exchange Act or otherwise subject to the ~~diversification~~ ~~benefit~~liabilities ~~across~~of ~~asset~~that ~~classes~~section. This annual report does not include an attestation report of the Partnership’s independent registered public

~~Because~~- ~~the~~70 business of the Partnership is the speculative trading of futures, forwards and options on such contracts, the composition of its trading portfolio can change significantly over any given time period, or even within a single trading day. Such changes could positively or negatively materially impact market risk as measured by VaR. -

~~The~~accounting ~~table~~firm ~~below~~regarding ~~supplements~~internal ~~the~~control ~~December 31,~~over ~~2010~~financial ~~VaR~~reporting ~~set~~pursuant ~~forth~~to ~~above~~SEC byrules ~~presenting~~that permit the Partnership’s ~~high, low, and average VaR,~~ as a ~~percentage~~non-accelerated offiler, ~~total~~to ~~net~~provide ~~assets~~only ~~for~~management’s ~~the~~report ~~four~~in ~~quarter-end~~this ~~reporting~~annual ~~periods from January 1, 2010 through December 31, 2010~~report.

-Changes 63in - Internal Control over Financial Reporting

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

December 31, 2010
Primary Market Risk Category	High			Low			Average
Currency		(0.96	)%		(0.30	)%		(0.68	)%
Interest Rate		(1.56	)		(0.37	)		(1.00	)
Equity		(1.31	)		(0.23	)		(0.80	)
Commodity		(1.83	)		(0.51	)		(1.24	)
Aggregate Value at Risk		(2.40	)%		(1.73	)%		(2.01	)%

Limitations on the Effectiveness of Controls

~~Limitations~~Any oncontrol ~~Value~~system, atno ~~Risk~~matter ashow anwell ~~Assessment~~designed and operated, can provide reasonable (not absolute) assurance that its objectives will be met. Furthermore, no evaluation of ~~Market~~controls ~~Risk~~can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

~~VaR~~Item 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 assets9B. OTHER ~~However, VaR risk measures should be viewed in light of the methodology’s limitations, which include, but may not be limited to the following:~~ INFORMATION

~~• past changes in market risk factors will not always result in accurate predictions of the distributions and correlations of future market movements;~~None.

•- ~~changes~~71 ~~in portfolio value caused by market movements may differ from those of the VaR model;~~-

•PART ~~VaR results reflect past market fluctuations applied to current trading positions while future risk depends on future positions;~~III

•Item ~~VaR~~10. DIRECTORS, ~~using~~EXECUTIVE aOFFICERS ~~one-day~~AND ~~time~~CORPORATE ~~horizon does not fully capture the market risk of positions that cannot be liquidated or hedged within one day; and~~GOVERNANCE

•The ~~the~~Partnership ~~historical~~has ~~market~~no ~~risk~~officers ~~factor~~or ~~data~~directors ~~used~~and ~~for~~its ~~VaR~~affairs ~~estimation~~are ~~may~~managed ~~provide~~by ~~only~~its ~~limited~~General ~~insight~~Partner. Investment ~~into~~decisions ~~losses~~are ~~that~~made ~~could~~by bethe ~~incurred under certain unusual market movements~~Advisors.

~~- 64 -~~ The

~~Table~~ officers and directors of ~~Contents~~the General Partner are Walter Davis (President and Chairman of the Board of Directors), Damian George (Chief Financial Officer and Director), Colbert Narcisse (Director), Douglas J. Ketterer (Director), Harry Handler (Director), Patrick T. Egan (Director), Alper Daglioglu (Director) and Craig Abruzzo (Director). Each director holds office until the earlier of his or her death, resignation or removal. Vacancies on the board of directors may be filled by either (i) the majority vote of the remaining directors or (ii) MSSBH, as the sole member of the General Partner. The officers of the General Partner are designated by the General Partner’s board of directors. Each officer will hold office until his or her successor is designated and qualified or until his or her death, resignation or removal.

InDirectors ~~addition,~~of the ~~VaR~~General ~~tables~~Partner ~~above~~are responsible for overall corporate governance of the General Partner and meet periodically to consider strategic decisions regarding the General Partner’s activities. Under CFTC rules, aseach ~~well~~Director asof the ~~past~~General ~~performance~~Partner is deemed to be a principal of the ~~Partnership~~General Partner and, ~~give no~~as ~~indication~~a ofresult, is listed as such with the ~~Partnership~~NFA. Walter Davis, Damian George, Patrick T. Egan and Alper Daglioglu serve on the General Partner’s ~~potential~~Investment ~~“risk~~Committee ofand ~~ruin”.~~are the trading principals responsible for allocation decisions.

The VaR tables provided present the results of the Partnership’s VaR for each of the Partnership’s market risk exposure at December 31, 2011 and market risk exposure on an aggregate basis at December 31, 2010, and for the four quarter-~~end~~ ~~reporting~~72 periods during calendar years 2011 and 2010. VaR is not necessarily representative of the Partnership’s historic risk, nor should it be used to predict the Partnership’s future financial performance or its ability to manage or monitor risk. There can be no assurance that the Partnership’s actual losses on a particular day will not exceed the VaR amounts indicated above or that such losses will not occur more than once in 100 trading days. -

~~Non-Trading~~Walter ~~Risk~~Davis, age 48, has been President and Chairman of the Board of Directors of the General Partner since June 2010, where his responsibilities include oversight of the General Partner’s funds and accounts. Since June 2010, Mr. Davis has been a principal and registered as an associated person of the General Partner, and is an associate member of the NFA. Since December 2012, Mr. Davis has been registered as a swap associated person of General Partner. Since June 2009, Mr. Davis has been employed by Morgan Stanley Wealth Management, a financial services firm, where his responsibilities include serving as a Managing Director and the Director of the Managed Futures Department. Since June 2009, Mr. Davis has been registered as an associated person of Morgan Stanley Wealth Management. From May 2006 through June 2010, Mr. Davis served as President and Chairman of the Board of Directors of Demeter Management LLC (“Demeter”), a registered commodity pool operator, where his responsibilities included oversight of Demeter’s funds and accounts. From May 2006 through December 2010, Mr. Davis was listed as a principal of Demeter, and from July 2006 through December 2010, Mr. Davis was registered as an associated person of Demeter. From April 2007 through June 2009, Mr. Davis was employed by MS&Co., a financial services firm, where his responsibilities included serving as the Managing Director and the Director of the Managed Futures Department. From April 2007 through June 2009, Mr. Davis was registered as an associated person of MS&Co. From August 2006 through April 2007, Mr. Davis was employed by Morgan Stanley DW Inc., a financial services firm, where his responsibilities included serving as a Managing Director and the Director of the Managed Futures Department. From August 2006 through April 2007, Mr. Davis was registered as an associated person of Morgan Stanley DW Inc. From September 1999 through August 2006, Mr. Davis was employed by MS&Co., a financial services firm, where his responsibilities included oversight of the sales and marketing of MS&Co.’s managed futures funds to

~~The Partnership has non~~-~~trading~~ ~~market~~73 ~~risk on its foreign cash balances not needed for margin. These balances and any market risk they may represent are immaterial.~~ -

~~The~~high ~~Partnership~~net ~~also~~worth ~~maintains~~and institutional investors on a ~~substantial~~global ~~portion~~basis. From ofJanuary ~~its~~1992 ~~available~~through ~~assets~~September in1999, ~~cash~~Mr. atDavis ~~MSSB;~~was asemployed ofby ~~December 31~~Chase Manhattan Bank’s Alternative Investment Group, ~~2011~~an alternative investment group, ~~such~~where ~~amount is~~his ~~equal~~responsibilities toincluded ~~approximately~~marketing ~~84%~~managed offutures ~~the~~funds ~~Partnership’s~~to high net ~~asset~~worth ~~value~~investors, as well as developing and structuring managed futures funds. Mr. ADavis ~~decline~~earned inhis ~~short-term~~Bachelor ~~interest~~of ~~rates~~Arts ~~would~~degree ~~result~~in Economics in aMay ~~decline~~1987 infrom the ~~Partnership’s~~University ~~cash~~of ~~management~~the ~~income.~~South ~~This~~and ~~cash~~his ~~flow~~Master ~~risk~~of isBusiness ~~not~~Administration ~~considered~~in toFinance beand ~~material~~International Business in May 1992 from Columbia University Graduate School of Business.

~~Materiality~~Damian George, asage ~~used~~45, ~~throughout~~has ~~this~~been ~~section~~a Director of the General Partner since November 2012. Since June 2012, isMr. ~~based~~George onhas been the Chief Financial Officer and a principal of the General Partner and is an ~~assessment~~associate member of ~~reasonably~~the ~~possible~~NFA. Mr. ~~market~~George ~~movements~~has been Vice President and ~~any~~ listed as a principal since December 2012, and registered as an associated ~~potential~~person ~~losses~~since January 2013, ~~taking~~of ~~into~~Morgan ~~account~~Stanley ~~the~~GWM ~~leverage~~Feeder Strategies LLC, ~~optionality~~which acts as a general partner to multiple alternative investment entities, and ~~multiplier~~Morgan ~~features~~Stanley ofHedgePremier ~~the~~GP ~~Partnership’s~~LLC, ~~market-sensitive~~which ~~instruments~~acts as a general partner and administrative agent to numerous hedge fund feeder funds. Since January 2013, ineach ~~relation~~such entity has been registered as a commodity pool operator with CFTC. Mr. George is responsible for overseeing the implementation of certain CFTC and NFA regulatory requirements applicable to such entities. Since August 2009, Mr. George has been employed by Morgan Stanley Wealth Management, a financial services firm, where his responsibilities include oversight of futures funds, budgeting, finance and Sarbanes-Oxley testing for the ~~Partnership’s~~Alternative ~~net~~Investments–Managed ~~assets~~Futures group. Since August 2009, Mr. George has been registered as an associated person of Morgan Stanley Wealth Management. From November 2005 through July 2009, Mr. George was employed by Citi Alternative Investments, a division of Citigroup

- 6574 -

~~Table~~Inc., a financial services firm, which administered Citigroup Inc.’s hedge fund and fund of ~~Contents~~funds business, where he served as Director and was responsible for futures funds 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. 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.

~~Qualitative~~Colbert ~~Disclosures~~Narcisse, age ~~Regarding~~47, ~~Primary~~has ~~Trading~~been ~~Risk~~a ~~Exposures~~Director of the General Partner since December 2011 and listed as a principal of the General Partner since February 2012. Since December 2012, Mr. Narcisse has been a Director on the Board of Directors and listed as a principal of Morgan Stanley GWM Feeder Strategies LLC, which acts as a general partner to multiple alternative investment entities, and Morgan Stanley HedgePremier GP LLC, which acts as a general partner and administrative agent to numerous hedge fund feeder funds. Since January 2013, each such entity has been registered as a commodity pool operator with CFTC. Since February 2011, Mr. Narcisse has been a Managing Director at Morgan Stanley Wealth Management, a financial services firm, where his responsibilities have included serving as Head of the Alternative Investment Group, Head of the Corporate Equity Solutions Group, and Chief Operating Officer of the Investment Strategy and Client Solutions Division. From July 2009 until February 2011, Mr. Narcisse served as Chief Executive Officer of Gold Bullion International, a business services company that enables retail investors to acquire, manage and store physical precious metals through their financial advisor. From March 2009 until July 2009, Mr. Narcisse took personal leave. From August 1990 until March 2009, Mr. Narcisse was employed by

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 manages its primary market risk exposures – constitute forward-~~looking~~ ~~statements~~75 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. -

~~The~~Merrill ~~Trading~~Lynch ~~Advisors~~& Co., Inc., a financial services firm, where his responsibilities included serving as Chief Operating Officer of Americas Investment Banking, Chief Operating Officer of the Global Wealth Management Division, and as an investment banker in ~~general~~both the Financial Institutions and Public Finance Groups. From July 1987 until August 1990, ~~tend~~Mr. toNarcisse ~~utilize~~was ~~trading~~employed ~~system(s)~~by tothe ~~take~~Federal ~~positions~~Reserve ~~when~~Bank ~~market~~of ~~opportunities~~New ~~develop~~York, where his responsibilities included serving as a Bank Examiner. Additionally, Mr. Narcisse serves on the Board of Harlem RBI, as the Vice Chair of Finance for the Montclair Cooperative School Board of Trustees, as an Audit Committee Member of the New York City Housing Authority, and ~~Ceres anticipates~~as ~~that~~a Member of the ~~Trading~~Executive ~~Advisors~~Leadership ~~will~~Council. Mr. ~~continue~~Narcisse toreceived dohis soBachelor of Science degree in Finance in June 1987 from New York University. He received his Master of Business Administration degree in July 1992 from Harvard Business School.

~~The~~Douglas ~~following~~J. ~~were~~Ketterer, age ~~the~~47, ~~primary~~has ~~trading~~been ~~risk~~a ~~exposures~~Director and a principal of the ~~Partnership~~ atGeneral Partner since December 31 2010. Since December 2012, ~~2011~~Mr. byKetterer ~~market~~has ~~sector~~been a Director on the Board of Directors and listed as a principal of Morgan Stanley GWM Feeder Strategies LLC, which acts as a general partner to multiple alternative investment entities, and Morgan Stanley HedgePremier GP LLC, which acts as a general partner and administrative agent to numerous hedge fund feeder funds. Since ItJanuary ~~may~~2013, beeach ~~anticipated~~such entity has been registered as a commodity pool operator with CFTC. From October 2003 through December 2010, ~~however~~Mr. Ketterer was listed as a principal of Demeter, ~~that~~a ~~these~~commodity ~~market~~pool ~~exposures~~operator, ~~will~~until ~~vary~~Demeter’s ~~materially~~combination ~~over~~with ~~time~~the General Partner. From July 2010 through the present, Mr. Ketterer has been employed by Morgan Stanley Wealth Management, a financial services firm, as Managing Director and as Head of the U.S. Field Management and U.S. Private Wealth Management Group, where his responsibilities include overseeing the U.S. Private Wealth Management Group and,

- 6676 -

~~Table~~as of ~~Contents~~June 2012, Head of U.S. Field Management. From March 1990 through July 2010, Mr. Ketterer was employed by MS&Co., a financial services firm, where his responsibilities included serving as Chief Operating Officer of the Wealth Management Group and Head of the Products Group. During Mr. Ketterer’s employment at MS&Co. his responsibilities included oversight over a number of departments including the Alternative Investments Group, the Consulting Services Group, the Annuities & Insurance Department, and the Retirement & Equity Solutions Group, which offered products and services through MS&Co.’s Global Wealth Management Group. Mr. Ketterer received his Master of Business Administration degree from New York University’s Leonard N. Stern School of Business in January 1994 and his Bachelor of Science degree in Finance from the University at Albany’s School of Business in May 1987.

~~Currencies.~~Harry ~~The~~Handler, age ~~Partnership’s~~54, ~~currency~~has ~~exposure~~been isa toDirector ~~exchange~~of ~~rate fluctuations,~~the ~~primarily~~General ~~fluctuations~~Partner ~~which~~since ~~disrupt~~December ~~the~~2010. Since ~~historical~~December ~~pricing~~2010, ~~relationships~~Mr. ~~between~~Handler ~~different~~has ~~currencies~~been registered as an associated person and ~~currency~~listed ~~pairs.~~as ~~These~~a ~~fluctuations~~principal ~~are~~of ~~influenced~~the byGeneral ~~interest~~Partner, ~~rate~~and ~~changes~~is asan ~~well~~associate member of the NFA. Mr. Handler was listed as ~~political~~a ~~and~~principal ~~general~~of ~~economic~~Demeter ~~conditions. The~~from ~~General~~May ~~Partner~~2005, ~~does~~and ~~not~~was ~~anticipate~~registered ~~that~~as ~~the~~an ~~risk~~associated ~~profile~~person of ~~the~~Demeter ~~Partnership~~from April 2006, until Demeter’s ~~currency~~combination ~~sector~~with ~~will~~the ~~change~~General ~~significantly~~Partner in ~~the~~December ~~future~~2010. Mr. Handler was registered as an associated person of Morgan Stanley DW Inc., a financial services firm, from February 1984 until on

~~Interest~~or ~~Rates.~~about ~~Interest~~April ~~rate~~2007, ~~movements~~when, ~~directly~~because ~~affect the price~~ of the ~~futures~~merger ~~positions held by the Partnership and indirectly the value~~ of ~~its~~Morgan ~~stock~~Stanley ~~index~~DW ~~and currency positions~~Inc. ~~Interest~~into ~~rate movements in one country as well as relative interest rate movements between countries materially impact the Partnership’s profitability~~MS&Co. ~~The Partnership’s primary interest rate exposure is to interest rate fluctuations in the United States and the other G-8 countries. However~~, ~~the Partnership/Funds also take futures positions on the government debt of smaller nations — e.g., Australia and New Zealand.~~ he

~~Equities.~~became ~~The~~registered ~~Partnership’s~~as ~~primary~~an ~~equity~~associated ~~exposure~~person isof ~~to equity price risk in the G-8 countries~~MS&Co. ~~The~~due ~~stock~~to ~~index futures traded by~~ the ~~Partnership~~transfer ~~are~~of ~~limited~~his tooriginal ~~futures~~registration onas ~~broadly~~an ~~based~~associated ~~indices.~~person As of ~~December 31,~~Morgan ~~2011~~Stanley ~~the~~DW ~~Partnership’s~~Inc. Mr. ~~primary~~Handler ~~exposures~~withdrew ~~were~~as inan ~~the~~associated ~~FTSE~~person ~~100~~of (UMS&Co.~~K.),~~ ~~S&P~~in ~~500~~June (U2009.S Mr.), ~~DAX~~Handler ~~(Germany),~~has ~~and~~been ~~CAC~~registered 40as ~~(France)~~an ~~stock~~associated ~~indices.~~person ~~The Partnership is primarily exposed to the risk~~ of ~~adverse~~Morgan ~~price~~Stanley ~~trends~~Wealth orManagement ~~static~~since ~~markets~~June in2009 ~~the major European, Pacific Rim,~~ and ~~North~~as ~~American~~a ~~indices.~~branch ~~(Static~~office ~~markets~~manager ~~would~~since ~~not~~February ~~cause major market changes but would make it difficult for the Partnership to avoid being “whipsawed” into numerous small losses~~2013.) Mr.

- 6777 -

~~Table~~Handler serves as an Executive Director at Morgan Stanley Wealth Management in the Global Wealth Management Group. Mr. Handler works in the Capital Markets Division and is responsible for Electronic Equity and Securities Lending. Additionally, Mr. Handler serves as Chairman of ~~Contents~~the Global Wealth Management Group’s Best Execution Committee. In his prior position, Mr. Handler was a Systems Director in Information Technology, in charge of Equity and Fixed Income Trading Systems along with the Special Products, such as Unit Trusts, Managed Futures, and Annuities. Prior to his transfer to the Information Technology Area, Mr. Handler managed the Foreign Currency and Precious Metals Trading Desk of Dean Witter, a financial services firm and predecessor company to Morgan Stanley, from July 1982 until January 1984. He also held various positions in the Futures Division where he helped to build the Precious Metals Trading Operation at Dean Witter. Before joining Dean Witter, Mr. Handler worked at Mocatta Metals, a precious metals trading firm and futures broker that was sold to Standard Charted Bank in the 1980’s, as an Assistant to the Chairman from March 1980 until June 1982. His roles at Mocatta Metals included positions on the Futures Order Entry Desk and the Commodities Exchange Trading Floor. Additional work included building a computerized Futures Trading System and writing a history of the company. Mr. Handler graduated on the Dean’s List from the University of Wisconsin-Madison with a Bachelor of Arts degree in History and Political Science.

~~Commodity~~Patrick T. Egan, age 43, has been a Director of the General Partner since December 2010. Since December 2010, Mr. Egan has been a principal and registered as an associated person of the General Partner, and is an associate member of the NFA. Since June 2011, Mr. Egan has been employed by Morgan Stanley Wealth Management, a financial services firm, where his responsibilities include serving as Executive Director and as Chief Risk Officer for Morgan Stanley Wealth Management

~~Energy.~~- ~~The~~78 Partnership’s primary energy market exposure is to natural gas and oil price movements, often resulting from political developments in the Middle East and weather conditions. Energy prices can be volatile and substantial profits and losses, which have been experienced in the past, are expected to continue to be experienced in these markets in the future. -

~~Softs~~Managed Futures. From ~~The~~June ~~Partnership’s~~2009 ~~trading~~through ~~risk~~June ~~exposure~~2011, inMr. ~~the~~Egan ~~soft~~was ~~commodities~~employed isby toMorgan ~~agricultural~~Stanley Wealth Management, where his responsibilities included serving as Co-~~related~~Chief ~~price~~Investment ~~movements~~Officer ~~which~~for ~~are often~~Morgan ~~directly~~Stanley ~~affected~~Wealth byManagement ~~severe~~Managed orFutures. Since ~~unexpected~~November ~~weather~~2010, ~~conditions~~Mr. ~~Lumber~~Egan has been registered as an associated person of Morgan Stanley Wealth Management. From April 2007 through June 2009, ~~cotton~~Mr. Egan was employed by MS&Co., a financial services firm, where his responsibilities included serving as Head of Due Diligence and ~~cocoa~~Manager ~~accounted~~Research for Morgan Stanley’s Managed Futures Department. From April 2007 through November 2010, Mr. Egan was registered as an associated person of MS&Co. From March 1993 through April 2007, Mr. Egan was employed by Morgan Stanley DW Inc., a financial services firm, where his initial responsibilities included serving as an analyst and manager within the ~~majority~~Managed Futures Department (with primary responsibilities for product development, due diligence, investment analysis and risk management of the ~~Partnership~~firm’s ~~soft~~commodity ~~commodities~~pools) ~~exposure~~and later included serving as Head of ~~December 31~~Due Diligence and Manager Research for Morgan Stanley’s Managed Futures Department. From February 1998 through April 2007, ~~2011~~Mr. Egan was registered as an associated person of Morgan Stanley DW Inc. From August 1991 through March 1993, Mr. Egan was employed by Dean Witter Intercapital, the asset management arm of Dean Witter Reynolds, Inc., where his responsibilities included serving as a mutual fund administration associate. Mr. Egan also served as a Director from November 2004 through October 2006, and from November 2006 through October 2008 of the Managed Funds Association’s Board of Directors, a position he was elected to by industry peers for two consecutive two-year terms. Mr. Egan earned his Bachelor of Business Administration degree with a concentration in Finance in May 1991 from the University of Notre Dame.

~~Metals.~~- ~~The~~79 ~~Partnership’s primary metal market exposure as of December 31, 2011 was to fluctuations in the price of aluminum, tin, and gold.~~ -

~~Livestock~~Alper Daglioglu, age 36, has been a Director and listed as a principal of the General Partner since December 2010. Since ~~The~~December ~~Partnership~~2010, Mr. Daglioglu has been employed by Morgan Stanley Wealth Management, a financial services firm, where his responsibilities include serving as Executive Director and Chief Investment Officer for Morgan Stanley Wealth Management Managed Futures and serving on the Alternative Investments Product Review Committee of Morgan Stanley Wealth Management’s Alternative ~~primary~~Investments ~~risk~~Group. From ~~exposure~~June 2009 through December 2010, Mr. Daglioglu was employed by Morgan Stanley Wealth Management, a financial services firm, where his responsibilities included serving as a Senior Analyst in ~~livestock~~the isProduct toOrigination ~~fluctuations~~Group. From December 2003 through June 2009, Mr. Daglioglu was employed by Morgan Stanley, a financial services firm, where his responsibilities included serving as a Senior Analyst in ~~cattle~~ the Product Origination Group, and ~~lean~~serving ~~hog~~as ~~prices~~the lead investment analyst for Global Macro and Managed Futures strategies within Morgan Stanley Graystone Research Group from February 2007 through June 2009. Mr. Daglioglu earned his

~~Grains.~~Bachelor ~~The~~of ~~Partnership’s~~Science ~~trading~~degree ~~risk~~in ~~exposure~~Industrial Engineering in ~~the~~June ~~grains~~2000 isfrom ~~primarily~~Galatasaray ~~to agricultural~~University ~~price~~and ~~movements~~his ~~which~~Master ~~are~~of ~~often~~Business ~~directly~~Administration ~~affected~~degree byin ~~severe~~Finance orin ~~unexpected~~May ~~weather~~2003 ~~conditions~~from the University of Massachusetts-Amherst’s Isenberg School of Management. Mr. ~~Wheat,~~Daglioglu ~~the~~was ~~soybean~~awarded ~~complex,~~a full merit scholarship and ~~corn~~research ~~accounted~~assistantship ~~for~~at the ~~majority~~Center offor ~~the~~International ~~Partnership’s~~Securities ~~grain~~and ~~exposure~~Derivatives asMarkets ofduring ~~December 31,~~his ~~2011~~graduate studies. In this capacity, he worked with various major financial

-institutions 68in - performance monitoring, asset allocation and statistical analysis projects and specialized on alternative approaches to risk assessment for hedge funds and managed futures. Mr. Daglioglu wrote and published numerous research papers on alternative investments. Mr. Daglioglu is a Chartered Alternative Investment Analyst charterholder.

~~Table~~- of80 ~~Contents~~-

~~Qualitative~~Craig ~~Disclosures~~Abruzzo, ~~Regarding~~age ~~Means~~44, has been a Director of ~~Managing~~the ~~Risk~~General ~~Exposure~~Partner since March 2013 and is an associate member of the NFA. His listing as a principal of the General Partner is currently pending. Since October 2007, Mr. Abruzzo has been the U.S. Head of Listed Derivatives for a financial services firm, where his responsibilities include overseeing the institutional futures commission merchant business. Since May 2012, Mr. Abruzzo has also served as the Global Head of OTC Clearing for MS&Co., where his responsibilities include oversight of the institutional OTC swap clearing business. Mr. Abruzzo has been listed as a principal of MS&Co. since October 2010, and has been registered as an associated person of MS&Co. since July 2007 and as a swap associated person since November 2012. Mr. Abruzzo earned his Bachelor of Arts degree in Political Science and Economics in May 1990 from Drew University and his juris doctor degree in May 1994 from the New York University School of Law.

~~The~~Section ~~Partnership~~16(a) ~~and~~Beneficial ~~the~~Ownership ~~Trading~~Reporting 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 Commodity Trading Advisors and by daily monitoring 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. Compliance

~~Ceres~~To ~~monitors and controls~~ the ~~risk of the~~ Partnership’s ~~non-trading instrument~~knowledge, ~~cash.~~all ~~Cash~~required isSection 16(a) filings during the ~~only~~fiscal ~~Partnership~~year ~~investment directed~~ended byDecember ~~Ceres~~31, ~~rather~~2012, ~~than~~were ~~the~~timely ~~Trading~~and ~~Advisors.~~correctly made.

-Code 69of - Ethics

~~Table~~The Partnership has not adopted a code of ~~Contents~~ethics that applies to the Partnership’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Partnership is operated by its general partner, Ceres. The President, Chief Financial Officer, and each member of the Board of Directors of Ceres are employees of Morgan Stanley and are subject to the code of ethics adopted by Morgan Stanley, the text of which can be viewed on Morgan Stanley’s website at http://www.morganstanley.com/individual/ourcommitment/codeofconduct. html.

~~Item 8.~~- ~~FINANCIAL~~81 ~~STATEMENTS AND SUPPLEMENTARY DATA~~ -

The ~~Financial~~Audit ~~Statements are incorporated by reference to the Partnership’s Annual Report, which is filed as Exhibit 13.01 hereto.~~ Committee

~~Supplementary~~The ~~data~~Partnership ~~specified~~is operated by ~~Item 302~~its ofgeneral ~~Regulation~~partner, ~~S-K:~~Ceres, and has no audit committee.

~~Summary~~Item of11. EXECUTIVE ~~Quarterly Results (Unaudited)~~ COMPENSATION

Quarter Ended	Total Trading Resultsincluding interest income			NetIncome/(Loss)			Net Income/(Loss) Per Unit
2011
March 31	$	(1,198,698	)	$	(1,484,693	)	$	(1.32	)
June 30		(532,962	)		(791,911	)		(0.74	)
September 30		524,689			283,582			0.26
December 31		(276,228	)		(501,266	)		(0.49	)
Total	$	(1,483,199	)	$	(2,494,288	)	$	(2.29	)
2010
March 31	$	1,019,328		$	721,284		$	0.57
June 30		411,830			107,768			0.08
September 30		1,244,727			944,754			0.78
December 31		848,782			549,796			0.46
Total	$	3,524,667		$	2,323,602		$	1.89

The Partnership has no directors and executive officers. As a limited partnership, the business of the Partnership is managed by Ceres, which is responsible for the administration of the business affairs of the Partnership but receives no compensation for such services.

Item 9 12. ~~CHANGES~~SECURITY INOWNERSHIP ~~AND~~OF ~~DISAGREEMENTS~~CERTAIN ~~WITH~~BENEFICIAL ~~ACCOUNTANTS~~OWNERS ~~ON ACCOUNTING~~ AND ~~FINANCIAL DISCLOSURE~~

~~None.~~ MANAGEMENT AND RELATED STOCKHOLDER MATTERS

-(a) Security 70Ownership - of Certain Beneficial Owners – At December 31, 2012, there were no persons known to be beneficial owners of more than 5 percent of the Units.

~~Table~~(b) Security Ownership of ~~Contents~~Management – At December 31, 2012, Ceres owned 12,152.331 Units of general partnership interest, representing a 1.54 percent interest in the Partnership.

~~Item 9A.~~(c) Changes ~~CONTROLS~~in ~~AND~~Control ~~PROCEDURES~~– None.

AsItem of13. CERTAIN ~~the~~RELATIONSHIPS ~~end~~AND ofRELATED ~~the period covered by this annual report~~TRANSACTIONS, the President and Chief Financial Officer of Ceres have evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act), and have judged such controls and procedures to be effective. AND

~~Management’s~~ DIRECTOR ~~Report on Internal Control Over Financial Reporting~~ INDEPENDENCE

~~Ceres~~Refer isto ~~responsible~~Note 2. Summary of Significant Accounting Policies, Note 4. Related Party Transactions, and Note 5. Trading Advisors of “Notes to Financial Statements”, in the accompanying Annual Report to Limited Partners for the ~~management~~year ended December 31, 2012, which is incorporated by reference to Exhibit 13.01 of this Form 10-K. In its capacity as the Partnership’s retail commodity broker, MS&Co. received

~~Management~~- is82 responsible for establishing and maintaining adequate internal control over financial reporting. The internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. -

~~The~~commodity ~~Partnership’s~~brokerage ~~internal~~fees ~~control~~(paid ~~over~~and ~~financial~~accrued ~~reporting~~by ~~includes~~the ~~those~~Partnership) ~~policies~~of ~~and~~$591,826 ~~procedures~~for ~~that:~~the year ended December 31, 2012.

•Item ~~Pertain~~14. PRINCIPAL toACCOUNTANT ~~the~~FEES ~~maintenance~~AND ~~of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Partnership;~~SERVICES

-MS&Co. 71on - behalf of the Partnership, pays all accounting fees. The Partnership reimburses MS&Co. through the brokerage fees it pays, as discussed in the Notes to Financial Statements in the Annual Report to the Limited Partners for the year ended December 31, 2012.

~~Table~~(1) Audit Fees. The aggregate fees for professional services rendered by Deloitte & Touche LLP (“D&T”) in connection with their audit of ~~Contents~~the Partnership’s financial statements and review of the financial statements included in the Quarterly Reports on Form 10-Q and in connection with statutory and regulatory filings were approximately $44,963 for the year ended December 31, 2012, and $40,915 for the year ended December 31, 2011.

•(2) Audit-Related ~~Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U~~Fees.S None. ~~GAAP, and that the Partnership’s transactions are being made only in accordance with authorizations of Management and directors of Ceres; and~~

•(3) Tax ~~Provide~~Fees. ~~reasonable~~The ~~assurance~~Partnership ~~regarding~~did ~~prevention~~not orpay ~~timely~~D&T ~~detection~~any ~~and~~amounts ~~correction~~in of2012 ~~unauthorized~~and ~~acquisition,~~2011 ~~use~~for orprofessional ~~disposition~~services ofin ~~the~~connection ~~Partnership’s~~with ~~assets~~tax ~~that~~compliance, ~~could~~tax ~~have~~advice, aand ~~material~~tax ~~effect on the financial statements~~planning.

~~Because~~(4) All ofOther ~~its inherent limitations, internal control over financial reporting may not prevent or detect misstatements~~Fees. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate None.

Management assessed the effectiveness of the Partnership’s internal control over financial reporting as of December 31, 2011. In making this assessment, Management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-~~Integrated~~ ~~Framework.~~83 ~~Based on our assessment and those criteria, Management believes that the Partnership maintained effective internal control over financial reporting as of December 31, 2011.~~ -

-PART ~~72 -~~ IV

~~Table~~Item of15. EXHIBITS, ~~Contents~~FINANCIAL STATEMENT SCHEDULES

~~Changes~~1. inListing ~~Internal~~of ~~Control over~~ Financial ~~Reporting~~ Statements

~~There~~The ~~have~~following ~~been~~financial nostatements ~~material~~and ~~changes~~report ~~during~~of ~~the~~independent ~~period~~registered ~~covered~~public byaccounting ~~this~~firm, ~~annual~~all ~~report~~appearing in the ~~Partnership’s~~accompanying ~~internal~~Annual ~~control~~Report ~~over financial~~to ~~reporting~~Limited ~~(as~~Partners ~~defined~~for ~~in Rules 13a-15(f) and 15d-15(f) of~~ the ~~Exchange~~year ~~Act)~~ended ~~that~~December ~~have~~31, ~~materially~~2012, ~~affected or~~ are ~~reasonably~~incorporated ~~likely~~by reference to ~~affect~~Exhibit ~~the~~13.01 ~~Partnership’s~~of ~~internal~~this ~~control~~Form ~~over financial reporting.~~ 10-K:

~~Limitations~~- onReport ~~the~~of ~~Effectiveness~~Deloitte of& ~~Controls~~Touche LLP, independent registered public accounting firm.

~~Any~~- ~~control~~Statements ~~system,~~of noFinancial ~~matter how well designed and operated~~Condition, ~~can~~including ~~provide~~the ~~reasonable~~Condensed ~~(not~~Schedules ~~absolute)~~of ~~assurance that its objectives will be met. Furthermore~~Investments, noas ~~evaluation~~ of ~~controls~~December ~~can~~31, ~~provide~~2012 ~~absolute assurance that all control issues~~ and ~~instances of fraud, if any, have been detected~~2011.

~~Item 9B.~~- ~~OTHER INFORMATION~~Statements of Income and Expenses and Changes in Partners' Capital for the years ended December 31, 2012, 2011, and 2010.

~~None.~~- Notes to Financial Statements.

-With 73the - exception of the aforementioned information and the information incorporated in Item 7, 8, and 13, the Annual Report to Limited Partners for the year ended December 31, 2012, is not deemed to be filed with this report.

~~Table~~2. Listing of ~~Contents~~Financial Statement Schedules

~~PART~~No ~~III~~Financial Statement schedules are required to be filed with this report.

~~Item 10~~3. ~~DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE~~ Exhibits

~~The~~For ~~Partnership~~the ~~has~~exhibits noincorporated ~~officers~~by reference or ~~directors~~filed ~~and~~herewith ~~its~~to ~~affairs~~this ~~are~~report, ~~managed~~refer byto ~~its~~Exhibit ~~General~~Index ~~Partner.~~on ~~Investment~~Pages ~~decisions~~E-1 ~~are~~to ~~made by the Advisors~~E-4.

~~The~~- ~~officers~~84 and directors of the General Partner are Walter Davis (President and Chairman of the Board of Directors), Brian Centner (Chief Financial Officer, Principal Accounting Officer), Colbert Narcisse (Director), Douglas J. Ketterer (Director), Ian Bernstein (Director), Harry Handler (Director), Patrick T. Egan (Director) and Alper Daglioglu (Director). Each director holds office until the earlier of his or her death, resignation or removal. Vacancies on the board of directors may be filled by either (i) the majority vote of the remaining directors or (ii) MSSBH, as the sole member of the General Partner. The officers of the General Partner are designated by the General Partner’s board of directors. Each officer will hold office until his or her successor is designated and qualified or until his or her death, resignation or removal. -

Walter Davis, age 47, has been President and Chairman of the Board of Directors of the General Partner since June 2010, where his responsibilities include oversight of the General Partner’s funds and accounts. Since June 2010, Mr. Davis has been a principal and registered as an associated person of the General Partner, and is an associate member of the NFA. Since June 2009, Mr. Davis has been employed by Morgan Stanley Smith Barney LLC (“Morgan Stanley Smith Barney”), a financial services firm, where his responsibilities include serving as Managing Director and the Director of the Managed Futures Department. Since June 2009, Mr. Davis has been registered as an associated person of Morgan Stanley SIGNATURE

-Pursuant 74to - the requirements of Section 13 or 15(d) 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)

March 26, 2013	By:	/s/Walter Davis
		Walter Davis,
		President and Director

~~Smith~~Pursuant ~~Barney.~~to ~~From~~the ~~May~~requirements ~~2006 through June 2010, Mr. Davis served as President and Chairman~~ of the ~~Board~~Securities ofExchange ~~Directors~~Act of ~~Demeter Management LLC (“Demeter”)~~1934, athis ~~registered~~report ~~commodity pool~~has ~~operator,~~been ~~where~~signed ~~his~~below responsibilities included oversight of Demeter’s funds and accounts. From May 2006 through December 2010, Mr. Davis was listed as a principal of Demeter, and from July 2006 through December 2010, Mr. Davis was registered as an associated person of Demeter. From April 2007 through June 2009, Mr. Davis was employed by ~~Morgan Stanley & Co. LLC (“MS & Co.”), a financial services firm, where his responsibilities included serving as~~ the ~~Managing~~following ~~Director~~persons ~~and~~on ~~the~~behalf ~~Director~~ of the ~~Managed~~registrant Futures Department. From April 2007 through June 2009, Mr. Davis was registered as an associated person of MS & Co. From August 2006 through April 2007, Mr. Davis was employed by Morgan Stanley DW Inc., a financial services firm, where his responsibilities included serving as Managing Director and ~~the~~in ~~Director of~~ the ~~Managed~~capacities Futures Department. From August 2006 through April 2007, Mr. Davis was registered as an associated person of Morgan Stanley DW Inc. From September 1999 through August 2006, Mr. Davis was employed by MS & Co., a financial services firm, where his responsibilities included oversight of the sales and ~~marketing~~ ~~of MS & Co.’s managed futures funds to high net worth and institutional investors~~ on a global basis. From January 1992 through September 1999, Mr. Davis was employed by Chase Manhattan Bank’s Alternative Investment Group, an alternative investment group, where his responsibilities included marketing managed futures funds to high net worth investors, as well as developing and structuring managed futures funds. Mr. Davis earned his Bachelor of Arts degree in Economics in May 1987 from the ~~University~~dates ~~of the South and his Master of Business Administration in Finance and International Business in May 1992 from Columbia University Graduate School of Business~~indicated.

-Ceres 75Managed - Futures LLC

BY:	/s/	Walter Davis	March 26, 2013
		Walter Davis, President, Director

	/s/	Damian George	March 26, 2013
		Damian George, Chief Financial Officer, Principal Accounting
		Officer, Director

	/s/	Craig Abruzzo	March 26, 2013
		Craig Abruzzo, Director

	/s/	Alper Daglioglu	March 26, 2013
		Alper Daglioglu, Director

	/s/	Patrick T. Egan	March 26, 2013
		Patrick T. Egan, Director

	/s/	Harry Handler	March 26, 2013
		Harry Handler, Director

	/s/	Douglas J. Ketterer	March 26, 2013
		Douglas J. Ketterer, Director

	/s/	Colbert Narcisse	March 26, 2013
		Colbert Narcisse, Director

~~Brian~~- ~~Centner,~~85 age 34, has been the Chief Financial Officer and a principal of the General Partner since September 2011. Since July 2009, Mr. Centner has been employed by Morgan Stanley Smith Barney, a financial services firm, where his responsibilities include oversight of accounting and financial and regulatory reporting of the General Partner’s managed futures funds. From February 2003 through July 2009, Mr. Centner was employed by Citi Alternative Investments (“CAI”), a division of Citigroup, a financial services firm, which administered Citigroup’s hedge fund and fund of funds business, where he served as Senior Vice President responsible for the accounting and financial and regulatory reporting of CAI’s managed futures funds. From June 2002 through February 2003, Mr. Centner was employed by KPMG LLP, a U.S. audit, tax and advisory services firm, as a Senior Associate within the Investment Management division, where his responsibilities included performing audits and attestation services for financial services firms. From September 2000 through June 2002, Mr. Centner was employed by Arthur Andersen LLP, a U.S. audit, tax and advisory services firm, where he served in the Financial Services division and his responsibilities included performing audits and attestation services for financial services firms. Mr. Centner earned his Bachelor of Science degree in Accounting in May 2000 from Binghamton University and his Master of Business Administration degree in May 2011 from New York University’s Leonard N. Stern School of Business. Mr. Centner is a Certified Public Accountant. -

~~Colbert Narcisse,~~EXHIBIT age 45, has been a Director and a principal of the General Partner since December 2011. Since February 2011, Mr. Narcisse has been a Managing Director at Morgan Stanley Smith Barney, a financial services firm, where his responsibilities have included serving as Head of the Alternative Investment Group, Head of the Corporate Equity Solutions Group, and Chief Operating Officer of the Investment Strategy and Client Solutions Division. From July 2009 until February 2011, INDEX

~~- 76 -~~ ITEM

~~Table~~3.01 Form of ~~Contents~~Amended and Restated Limited Partnership Agreement of the Partnership is incorporated by reference to Exhibit A of the Partnership’s Prospectus, dated May 1, 2008, filed with the Securities and Exchange Commission pursuant to Rule 424(b)(3) under the Securities Act of 1933 on May 8, 2008.

Mr3. ~~Narcisse served as Chief Executive Officer of Gold Bullion International,~~ 01(a) ~~business~~Amendment ~~services~~No. ~~company~~1 ~~that enables retail investors~~ to ~~acquire,~~the ~~manage~~Amended and ~~store~~Restated ~~physical~~Limited ~~precious~~Partnership ~~metals through~~Agreement ~~their~~of ~~financial~~the ~~advisor.~~Partnership, ~~From~~dated ~~March~~May ~~2009 until July 2009~~31, ~~Mr. Narcisse took personal leave. From August 1990 until March~~ 2009, ~~Mr. Narcisse~~is ~~was~~incorporated ~~employed~~ by ~~Merrill~~reference ~~Lynch &~~to ~~Co.,~~Exhibit ~~Inc~~3., 01(a) ~~financial services firm, where his responsibilities included serving as Chief Operating Officer~~ of ~~Americas Investment Banking, Chief Operating Officer of~~ the ~~Global~~Partnership’s ~~Wealth~~Form ~~Management~~8-K ~~Division,~~(File ~~and~~No.0-26340) asfiled anwith ~~investment banker in both~~ the ~~Financial~~Securities ~~Institutions~~ and ~~Public~~Exchange ~~Finance~~Commission Groups. From July 1987 until August 1990, Mr. Narcisse was employed by the Federal Reserve Bank of New York, where his responsibilities included serving as a Bank Examiner. Additionally, Mr. Narcisse serves on ~~the~~June ~~Board of Harlem RBI~~4, as the Vice Chair of Finance for the Montclair Cooperative School Board of Trustees, as an Audit Committee Member of the New York City Housing Authority, and as a Member of the Executive Leadership Council2009. Mr. Narcisse received his Bachelor of Science degree in Finance in June 1987 from New York University. He received his Master of Business Administration degree in July 1992 from Harvard Business School.

~~Douglas J~~3.02 ~~Ketterer,~~Certificate ~~age 46, has been a Director and a principal~~ of ~~the~~Limited ~~General Partner since December 2010. From October 2003 through December 2010~~Partnership, ~~Mr. Ketterer~~dated ~~was~~April ~~listed as a principal of Demeter~~18, ~~a commodity pool operator~~1994, ~~until~~is ~~Demeter’s~~incorporated ~~combination~~by ~~with~~reference ~~the~~to ~~General~~Exhibit ~~Partner~~3.02 ~~From July 2010 through the present, Mr. Ketterer has been employed by Morgan Stanley Smith Barney, a financial services firm, as Managing Director and Head~~ of the ~~U.S.~~Partnership’s ~~Private~~Registration ~~Wealth~~Statement ~~Management~~on ~~Group,~~Form ~~where his responsibilities include overseeing the U.~~S.-1 ~~Private~~(File ~~Wealth Management Group~~No. ~~From~~33-80146) ~~March~~filed ~~1990~~with ~~through~~the ~~July~~Securities ~~2010,~~and ~~Mr. Ketterer~~Exchange ~~was~~Commission ~~employed~~on byJune ~~MS & Co.~~10, ~~a financial services firm, where his~~ 1994.

3.03 Certificate of Amendment of Certificate of Limited Partnership, dated April 17, 1998 (changing its name from Dean Witter Spectrum Global Balanced L.P.), is incorporated by reference to Exhibit 3.03 of the Partnership's Form 10-K 77(File No. 0- 26340) for the fiscal year ended December 31, 1998, filed with the Securities and Exchange Commission on March 31, 1999.

~~Table~~3.04 Certificate of ~~Contents~~Amendment of Certificate of Limited Partnership, dated November 1, 2001 (changing its name from Morgan Stanley Dean Witter Spectrum Global Balanced L.P.), is incorporated by reference to Exhibit 3.01 of the Partnership’s Form 8-K (File No. 0-26340) filed with the Securities and Exchange Commission on November 1, 2001.

~~responsibilities~~3.05 ~~included~~Certificate ~~serving as Chief Operating Officer~~ of ~~the~~Amendment ~~Wealth Management Group and Head~~ of ~~the~~Certificate ~~Products Group. During Mr. Ketterer’s employment at MS & Co. his responsibilities included oversight over a number~~ of ~~departments~~Limited ~~including the Alternative Investments Group~~Partnership, ~~the~~dated ~~Consulting~~June ~~Services Group~~1, ~~the Annuities & Insurance Department~~2009, ~~and~~(changing the ~~Retirement &~~name ~~Equity Solutions Group, which offered products~~ and ~~services~~mailing ~~through~~address ~~MS &~~of ~~Co.’s~~the ~~Global~~general ~~Wealth~~partner ~~Management Group. Mr. Ketterer received his Master~~ of ~~Business~~the ~~Administration~~Partnership), ~~degree~~is ~~from~~incorporated ~~New~~by ~~York~~reference ~~University’s~~to ~~Leonard~~Exhibit N3.05 ~~Stern School~~ of ~~Business~~the inPartnership’s ~~January 1994~~form ~~and~~8-K ~~his~~(File ~~Bachelor~~No. of0-26340) ~~Science~~filed ~~degree~~with ~~in Finance from~~ the ~~University~~Securities atand ~~Albany’s~~Exchange ~~School~~Commission ofon ~~Business~~June in4, ~~May 1987~~2009.

~~Ian Bernstein,~~3.06 ~~age~~Certificate ~~49,~~of ~~has~~Amendment ~~been a Director~~ of ~~the~~Certificate ~~General Partner and listed as a principal~~ of ~~the~~Limited ~~General~~Partnership, ~~Partner~~dated ~~since~~September ~~December~~29, ~~2010. From June~~ 2009 ~~through~~(changing ~~the~~its ~~present,~~name ~~Mr. Bernstein~~from ~~has been employed by~~ Morgan Stanley ~~Smith~~Spectrum ~~Barney,~~Global aBalanced ~~financial services firm, as Managing Director of Capital Markets, with oversight of risk and infrastructure, joint venture negotiations and integration~~L. ~~From April 2007 through the present, Mr~~P. ~~Bernstein~~ ~~has~~to ~~been~~Morgan ~~employed~~Stanley bySmith ~~MS &~~Barney ~~Co.,~~Spectrum ~~a financial services firm, where his responsibilities include serving as Managing Director of the Capital Markets group, the head of the~~ Global ~~Wealth~~Balanced ~~Management group, and serving as market risk manager~~L. ~~From October 1984 through April 2007, Mr~~P. ~~Bernstein~~), ~~was~~is ~~employed~~incorporated by ~~Morgan~~reference ~~Stanley~~to DWExhibit ~~Inc~~3.,06 ~~a financial services firm, where his responsibilities included serving as a Repo trader, manager~~ of the ~~Repo~~Partnership’s ~~trading~~Form ~~desk,~~8-K ~~and~~(File ~~Chief Operating Officer for fixed income~~No. ~~Mr. Bernstein also~~0-26340) ~~served~~filed aswith ~~Managing Director of Morgan Stanley DW Inc. from March 2004 through April 2007. Mr. Bernstein earned his Bachelor of Arts in May 1980 from~~ the ~~University~~Securities ~~of Buckingham~~ and ~~his~~Exchange ~~Master~~Commission ofon ~~Business~~October ~~Administration~~5, ~~in May 1988 from New York University’s Leonard N~~2009. ~~Stern School of Business.~~

10.01 Management Agreement, dated as of November 1, 1994, among the Partnership, the General Partner, and SSARIS Advisors, LLC (formerly RXR, Inc.), is incorporated by reference to Exhibit 10.01 of the Partnership's Form 10-K 78(File No. 0- 26340) for fiscal year ended December 31, 1998, filed with the Securities and Exchange Commission on March 31, 1999.

~~Table of Contents~~E-1

~~Harry Handler, age 52, has been a Director of the General Partner since December 2010~~10.11 ~~Since December~~Form ~~2010, Mr. Handler has been registered as an associated person and listed as a principal~~ of ~~the~~Subscription ~~General Partner,~~ and isExchange anAgreement ~~associate member of the NFA. Mr. Handler was listed as a principal of Demeter from May 2005,~~ and ~~was registered~~Power ~~as an associated person~~ of ~~Demeter~~Attorney from April 2006, until Demeter’s combination with the General Partner in December 2010. Mr. Handler was registered as an associated person of Morgan Stanley DW Inc., a financial services firm, from February 1984 until on or about April 2007, when, because of the merger of Morgan Stanley DW Inc. into MS & Co., he became registered as an associated person of MS & Co. due to ~~the~~be ~~transfer~~executed ofby ~~his~~each ~~original~~purchaser ~~registration as an associated person~~ of ~~Morgan~~Units Stanley DW Inc. Mr. Handler withdrew as an associated person of MS & Co. in June 2009. Mr. Handler has been registered as an associated person of Morgan Stanley Smith Barney since June 2009. Mr. Handler serves as an Executive Director at Morgan Stanley Smith Barney in the Global Wealth Management Group. Mr. Handler works in the Capital Markets Division and is ~~responsible~~incorporated ~~for~~by ~~Electronic~~reference ~~Equity~~to ~~and~~Exhibit ~~Securities~~B ~~Lending. Additionally, Mr. Handler serves as Chairman~~ of the ~~Global Wealth Management Group~~Partnership’s ~~Best~~Prospectus ~~Execution~~dated ~~Committee.~~May ~~In his prior position~~1, ~~Mr. Handler was a Systems Director in Information Technology~~2008, inas ~~charge~~filed ~~of Equity and Fixed Income Trading Systems along~~ with the ~~Special~~Securities ~~Products, such as Unit Trusts, Managed Futures,~~ and ~~Annuities.~~Exchange ~~Prior~~Commission topursuant ~~his transfer~~ to ~~the~~Rule ~~Information~~424 ~~Technology~~(b)(3) ~~Area,~~under ~~Mr. Handler managed~~ the ~~Foreign~~Securities ~~Currency~~Act ~~and Precious Metals Trading Desk~~ of ~~Dean Witter,~~1933 aon ~~financial~~May ~~services firm and predecessor company to Morgan Stanley~~8, ~~from July 1982 until January 1984~~2008. He also held various positions in the Futures Division where he helped to build the Precious Metals Trading Operation at Dean Witter. Before joining Dean Witter, Mr. Handler worked at Mocatta Metals, a precious metals trading firm and futures broker that was sold to Standard Charted Bank in the 1980’s, as an Assistant to the Chairman from March 1980

10.13 Escrow Agreement, dated as of July 25, 2007, among The Bank of New York, the General Partner, and Morgan Stanley & Co. Incorporated, is incorporated by reference to Exhibit 10.13 of the Partnership’s Form 8-K 79(File No. 0- 26340) filed with the Securities and Exchange Commission on July 31, 2007.

~~Table~~10.14 Form of ~~Contents~~Subscription Agreement Update Form to be executed by purchasers of Units is incorporated by reference to Exhibit C of the Partnership’s Prospectus, dated May 1, 2008, filed with the Securities and Exchange Commission pursuant to Rule 424(b)(3) under the Securities Act of 1933 on May 8, 2008.

~~until June 1982~~10.15 ~~His~~Amended ~~roles~~and atRestated ~~Mocatta~~Customer ~~Metals~~Agreement ~~included~~between ~~positions on~~ the ~~Futures~~Partnership ~~Order Entry Desk~~ and ~~the~~Morgan ~~Commodities~~Stanley ~~Exchange~~DW, ~~Trading~~dated ~~Floor.~~as ~~Additional~~of ~~work~~October ~~included~~16, ~~building~~2000, ais ~~computerized Futures~~incorporated ~~Trading~~by ~~System~~reference ~~and~~to ~~writing~~Exhibit a10.01 ~~history~~ of the ~~company. Mr. Handler graduated on the Dean~~Partnership’s ~~List~~Form ~~from~~8-K ~~the~~(File ~~University~~No. ~~of Wisconsin~~0-~~Madison~~26340) filed with athe ~~Bachelor~~Securities ofand ~~Arts~~Exchange ~~degree~~Commission inon ~~History~~November ~~and~~1, ~~Political Science~~2001.

~~Patrick T~~10. ~~Egan, age 42, has been~~ 15(a) ~~Director~~Amendment ~~of the General Partner since December 2010~~No. ~~Since~~1 ~~December~~to ~~2010, Mr. Egan has been a principal and registered as an associated person of~~ the ~~General~~Amended ~~Partner,~~ and isRestated anCustomer ~~associate~~Agreement ~~member~~between of the ~~NFA.~~Partnership ~~Since June 2011, Mr. Egan has been employed by Morgan Stanley Smith Barney, a financial services firm, where his responsibilities include serving as Executive Director~~ and ~~as Chief Risk Officer for~~ Morgan Stanley ~~Smith~~DW ~~Barney Managed Futures~~Inc. ~~From June 2009 through June 2011~~, ~~Mr. Egan~~dated ~~was~~July ~~employed by Morgan Stanley Smith Barney~~1, ~~where his responsibilities included serving as Co-Chief Investment Officer for Morgan Stanley Smith Barney Managed Futures. Since November 2010~~2005, ~~Mr. Egan~~is ~~has~~incorporated ~~been~~by ~~registered~~reference asto anExhibit ~~associated person of Morgan Stanley Smith Barney~~10. ~~From April 2007 through June 2009, Mr. Egan was employed by MS & Co.,~~ 15(a) ~~financial services firm, where his responsibilities included serving as Head~~ of ~~Due~~the ~~Diligence and Manager Research for Morgan Stanley~~Partnership’s ~~Managed~~Form ~~Futures~~10-Q ~~Department.~~(File ~~From April 2007 through November 2010, Mr~~No. ~~Egan~~ ~~was~~0-26340) ~~registered~~filed as an associated person of MS & Co. From March 1993 through April 2007, Mr. Egan was employed by Morgan Stanley DW Inc., a financial services firm, where his initial responsibilities included serving as an analyst and manager within the Managed Futures Department (with ~~primary responsibilities for product development, due diligence, investment analysis and risk management of~~ the ~~firm’s~~Securities ~~commodity pools)~~ and ~~later~~Exchange ~~included~~Commission ~~serving~~on asAugust ~~Head~~12, ~~of Due Diligence and Manager Research for Morgan Stanley’s Managed Futures Department~~2005. ~~From February~~

10.16 Commodity Futures Customer Agreement between MS&Co. and the Partnership, and acknowledged and agreed to by Morgan Stanley DW, dated as of June 6, 2000, is incorporated by reference to Exhibit 10.02 of the Partnership’s Form 8-K 80(File No. 0- 26340) filed with the Securities and Exchange Commission on November 1, 2001.

~~Table~~10.17 Customer Agreement between the Partnership and MSIP, dated as of ~~Contents~~May 1, 2000, is incorporated by reference to Exhibit 10.04 of the Partnership’s Form 8-K (File No. 0-26340) filed with the Securities and Exchange Commission on November 1, 2001.

~~1998 through April 2007, Mr~~10. ~~Egan~~18 ~~was~~Foreign ~~registered~~Exchange asand anOptions ~~associated~~Master ~~person~~Agreement ofbetween ~~Morgan Stanley DW Inc~~MS&Co. ~~From~~and ~~August~~the ~~1991 through March 1993~~Partnership, ~~Mr. Egan~~dated ~~was~~as ~~employed by Dean Witter Intercapital, the asset management arm~~ of ~~Dean~~April ~~Witter Reynolds~~30, ~~Inc.~~2000, ~~where~~is ~~his~~incorporated ~~responsibilities~~by ~~included~~reference ~~serving~~to asExhibit ~~a mutual fund administration associate~~10.05 ~~Mr. Egan also served as a Director from November 2004 through October 2006, and from November 2006 through October 2008~~ of the ~~Managed Funds Association~~Partnership’s ~~Board~~Form ~~of Directors, a position he was elected to by industry peers for two consecutive two~~8-~~year~~K ~~terms.~~(File MrNo. ~~Egan~~ ~~earned~~0-26340) ~~his~~filed ~~Bachelor of Business Administration degree~~ with athe ~~concentration~~Securities inand ~~Finance~~Exchange inCommission ~~May~~on ~~1991~~November ~~from~~1, ~~the University of Notre Dame~~2001.

~~Alper~~10.19 ~~Daglioglu,~~Securities ~~age~~Account ~~34,~~Control ~~has~~Agreement ~~been~~between ~~a Director and listed as a principal of~~ the ~~General~~Partnership ~~Partner~~and ~~since December 2010~~MS&Co. ~~Since December 2010~~, ~~Mr. Daglioglu~~dated ~~has~~as ~~been~~of ~~employed~~May ~~by Morgan Stanley Smith Barney~~1, ~~a financial services firm~~2000, ~~where~~is ~~his~~incorporated ~~responsibilities~~by ~~include~~reference ~~serving~~to asExhibit ~~Executive Director~~10.03 ~~and~~of ~~Chief Investment Officer for Morgan Stanley Smith Barney Managed Futures and serving on~~ the ~~Alternative Investments Product Review Committee of Morgan Stanley Smith Barney~~Partnership’s ~~Alternative~~Form ~~Investments~~8-K ~~Group.~~(File ~~From June 2009 through December 2010, Mr~~No. ~~Daglioglu~~ ~~was~~0-26340) ~~employed~~filed bywith ~~Morgan Stanley Smith Barney, a financial services firm, where his responsibilities included serving as a Senior Analyst in~~ the ~~Product~~Securities ~~Origination~~and ~~Group.~~Exchange ~~From~~Commission ~~December~~on ~~2003~~November ~~through June 2009~~1, ~~Mr. Daglioglu~~ was employed by Morgan Stanley, a financial services firm, where his responsibilities included serving as a Senior Analyst in the Product Origination Group, and serving as the lead investment analyst for Global Macro and Managed Futures strategies within Morgan Stanley Graystone Research Group from February 2007 through June 20092001. ~~Mr. Daglioglu earned his Bachelor of Science degree in Industrial Engineering in June 2000 from Galatasaray University and his Master of Business Administration degree in Finance~~

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~~Table~~10.20 Management Agreement, dated as of ~~Contents~~October 9, 2007, among the Partnership, the General Partner, and Altis Partners (Jersey) Limited, is incorporated by reference to Exhibit 10.20 of the Partnership’s Form 8-K (File No. 0-26340) filed with the Securities and Exchange Commission on October 15, 2007.

~~in May 2003 from the University of Massachusetts-Amherst’s Isenberg School of Management~~10. ~~Mr. Daglioglu was awarded~~ 20(a) ~~full~~Amendment ~~merit~~No. ~~scholarship~~1 ~~and~~to ~~research~~Management ~~assistantship~~Agreement atamong the ~~Center~~Partnership, ~~for International~~the ~~Securities~~General Partner, and ~~Derivatives~~Altis ~~Markets~~Partners ~~during~~(Jersey) ~~his~~Limited, ~~graduate~~dated ~~studies.~~as Inof ~~this~~July ~~capacity~~28, ~~he worked with various major financial institutions in performance monitoring~~2008, ~~asset~~is ~~allocation~~incorporated ~~and~~by ~~statistical~~reference ~~analysis~~to ~~projects~~Exhibit ~~and~~10.20(a) ~~specialized~~of ~~on alternative~~the ~~approaches~~Partnership’s toForm ~~risk~~8-K ~~assessment~~(File ~~for~~No. ~~hedge~~0-26340) ~~funds~~filed ~~and~~with ~~managed~~the ~~futures.~~Securities ~~Mr. Daglioglu wrote~~ and ~~published~~Exchange ~~numerous~~Commission ~~research papers~~ on ~~alternative~~August ~~investments.~~1, Mr2008. ~~Daglioglu is a Chartered Alternative Investment Analyst charterholder.~~

~~Section 16~~10.22 Management Agreement, dated as of October 9, 2007, among the Partnership, the General Partner, and C-View International Limited, is incorporated by reference to Exhibit 10.22 of the Partnership’s Form 8-K (aFile No. 0-26340) ~~Beneficial~~filed ~~Ownership~~with ~~Reporting~~the ~~Compliance~~Securities and Exchange Commission on October 15, 2007.

To13.01 ~~the~~December ~~Partnership’s~~31, ~~knowledge~~2012, ~~all~~Annual ~~required~~Report ~~Section 16(a)~~to ~~filings~~Limited ~~during~~Partners ~~the~~is ~~fiscal~~filed ~~year ended December 31, 2011, were timely and correctly made~~herewith.

~~Code~~31.01 Certification of ~~Ethics~~President of Ceres Managed Futures LLC, the general partner of the Partnership pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~The~~31.02 ~~Partnership~~Certification ~~has~~of ~~not~~Chief ~~adopted~~Financial aOfficer ~~code~~ of ~~ethics~~Ceres ~~that~~Managed ~~applies~~Futures toLLC, the ~~Partnership’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Partnership is operated by its~~ general partner, ~~Ceres. The President, Chief Financial Officer, and each member~~ of the ~~Board~~Partnership ofpursuant ~~Directors~~to ofSection ~~Ceres~~302 ~~are employees~~ of ~~Morgan Stanley or MSSB and are subject to~~ the ~~code of~~Sarbanes-Oxley ~~ethics~~Act ~~adopted by Morgan Stanley, the text~~ of ~~which can be viewed on Morgan Stanley’s website at http://www~~2002.~~morganstanley.com/individual/ourcommitment/codeofconduct. html.~~

-32.01 82Certification 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.

~~Table~~32.02 Certification of ~~Contents~~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.

~~The~~101.INS^ ~~Audit~~XBRL ~~Committee~~Instance Document

~~The~~101.SCH^ ~~Partnership~~XBRL isTaxonomy ~~operated~~Extension ~~by its general partner, Ceres, and has no audit committee.~~ Schema

~~Item 11~~101.CAL^ ~~EXECUTIVE~~XBRL ~~COMPENSATION~~Taxonomy Extension Calculation Linkbase

~~The Partnership has no directors and executive officers~~101.DEF^ AsXBRL aTaxonomy ~~limited~~Extension ~~partnership,~~Definition ~~the business of the Partnership is managed by Ceres, which is responsible for the administration of the business affairs of the Partnership but receives no compensation for such services.~~ Linkbase

~~Item 12~~101.LAB^ ~~SECURITY~~XBRL ~~OWNERSHIP~~Taxonomy ~~OF CERTAIN~~Extension ~~BENEFICIAL~~Label ~~OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS~~ Linkbase

~~(a)~~101.PRE^ ~~Security~~XBRL ~~Ownership~~Taxonomy ofExtension ~~Certain Beneficial~~Presentation ~~Owners – At December 31, 2011, there were no persons known to be beneficial owners of more than 5 percent of the Units.~~ Linkbase

~~(b) Security Ownership of Management – At December 31, 2011, Ceres owned 12,152.331 Units of general partnership interest, representing a 1.28 percent interest in the Partnership.~~ E-3

~~(c)~~^ Submitted ~~Changes~~electronically ~~in Control – None~~herewith.

~~Item 13~~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 ~~CERTAIN~~of ~~RELATIONSHIPS~~this ~~AND~~data ~~RELATED~~are ~~TRANSACTIONS~~advised that, ~~AND~~pursuant ~~DIRECTOR~~to ~~INDEPENDENCE~~ Rule 406T, these interactive data files are deemed not filed and otherwise are not subject to liability.

Refer to Note 2 – “Summary of Significant Accounting Policies”, Note 4 – “Related Party Transactions”, and Note 5 – “Trading Advisors” of “Notes to Financial Statements”, in the accompanying Annual Report to Limited Partners for the year ended December 31, 2011, which is incorporated by reference to Exhibit 13.01 of this Form 10E-~~K. In its capacity as the Partnership’s retail commodity broker, MS&Co. received commodity brokerage fees (paid and accrued by the Partnership) of $764,480 for the year ended December 31, 2011.~~ 4

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Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

MS&Co. on behalf of the Partnership, pays all accounting fees. The Partnership reimburses MS&Co. through the brokerage fees it pays, as discussed in the Notes to Financial Statements in the Annual Report to the Limited Partners for the year ended December 31, 2011.

(1) Audit Fees. The aggregate fees for professional services rendered by Deloitte & Touche LLP (“D&T”) in connection with their audit of the Partnership’s financial statements and review of the financial statements included in the Quarterly Reports on Form 10-Q and in connection with statutory and regulatory filings were approximately $40,915 for the year ended December 31, 2011, and $39,933 for the year ended December 31, 2010.

(2) Audit-Related Fees. None.

(3) Tax Fees. The Partnership did not pay D&T any amounts in 2011 and 2010 for professional services in connection with tax compliance, tax advice, and tax planning.

(4) All Other Fees. None.

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PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

1. Listing of Financial Statements

The following financial statements and report of independent registered public accounting firm, all appearing in the accompanying Annual Report to Limited Partners for the year ended December 31, 2011, are incorporated by reference to Exhibit 13.01 of this Form 10-K:

• Report of Deloitte & Touche LLP, independent registered public accounting firm.

• Statements of Financial Condition, including the Condensed Schedules of Investments, as of December 31, 2011 and 2010.

• Statements of Income and Expenses and Changes in Partners' Capital for the years ended December 31, 2011, 2010, and 2009.

• Notes to Financial Statements.

With the exception of the aforementioned information and the information incorporated in Items 7, 8, and 13, the Annual Report to Limited Partners for the year ended December 31, 2011, is not deemed to be filed with this report.

2. Listing of Financial Statement Schedules

No Financial Statement schedules are required to be filed with this report.

3. Exhibits

For the exhibits incorporated by reference or filed herewith to this report, refer to Exhibit Index on Pages E-1 to E-3.

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SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) 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)
March 28, 2012	By:	/s/ Walter Davis
		Walter Davis,
		President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Ceres Managed Futures LLC
BY:	/s/ Walter Davis	March 28, 2012
	Walter Davis, President, Director
	/s/ Brian Centner	March 28, 2012
	Brian Centner, Chief Financial Officer, Principal Accounting Officer
	/s/ Ian Bernstein	March 28, 2012
	Ian Bernstein, Director
	/s/ Alper Daglioglu	March 28, 2012
	Alper Daglioglu, Director
	/s/ Patrick T. Egan	March 28, 2012
	Patrick T. Egan, Director
	/s/ Harry Handler	March 28, 2012
	Harry Handler, Director
	/s/ Douglas J. Ketterer	March 28, 2012
	Douglas J. Ketterer, Director
	/s/ Colbert Narcisse	March 28, 2012
	Colbert Narcisse, Director

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ITEM		EXHIBIT INDEX
3.01		Form of Amended and Restated Limited Partnership Agreement of the Partnership is incorporated by reference to Exhibit A of the Partnership’s Prospectus, dated May 1, 2008, filed with the Securities and Exchange Commission pursuant to Rule 424(b)(3) under the Securities Act of 1933 on May 8, 2008.
3.01(a)		Amendment No. 1 to the Amended and Restated Limited Partnership Agreement of the Partnership, dated May 31, 2009, is incorporated by reference to Exhibit 3.01(a) of the Partnership’s Form 8-K (File No.0-26340) filed with the Securities and Exchange Commission on June 4, 2009.
3.02		Certificate of Limited Partnership, dated April 18, 1994, is incorporated by reference to Exhibit 3.02 of the Partnership’s Registration Statement on Form S-1 (File No. 33-80146) filed with the Securities and Exchange Commission on June 10, 1994.
3.03		Certificate of Amendment of Certificate of Limited Partnership, dated April 17, 1998 (changing its name from Dean Witter Spectrum Global Balanced L.P.), is incorporated by reference to Exhibit 3.03 of the Partnership’s Form 10-K (File No. 0-26340) for the fiscal year ended December 31, 1998, filed with the Securities and Exchange Commission on March 31, 1999.
3.04		Certificate of Amendment of Certificate of Limited Partnership, dated November 1, 2001 (changing its name from Morgan Stanley Dean Witter Spectrum Global Balanced L.P.), is incorporated by reference to Exhibit 3.01 of the Partnership’s Form 8-K (File No. 0-26340) filed with the Securities and Exchange Commission on November 1, 2001.
3.05		Certificate of Amendment of Certificate of Limited Partnership, dated June 1, 2009, (changing the name and mailing address of the general partner of the Partnership), is incorporated by reference to Exhibit 3.05 of the Partnership’s form 8-K (File No. 0-26340) filed with the Securities and Exchange Commission on June 4, 2009.
3.06		Certificate of Amendment of Certificate of Limited Partnership, dated September 29, 2009 (changing its name from Morgan Stanley Spectrum Global Balanced L.P. to Morgan Stanley Smith Barney Spectrum Global Balanced L.P.), is incorporated by reference to Exhibit 3.06 of the Partnership’s Form 8-K (File No. 0-26340) filed with the Securities and Exchange Commission on October 5, 2009.
10.01		Management Agreement, dated as of November 1, 1994, among the Partnership, the General Partner, and SSARIS Advisors, LLC (formerly RXR, Inc.), is incorporated by reference to Exhibit 10.01 of the Partnership’s Form 10-K (File No. 0-26340) for fiscal year ended December 31, 1998, filed with the Securities and Exchange Commission on March 31, 1999.

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10.11		Form of Subscription and Exchange Agreement and Power of Attorney to be executed by each purchaser of Units is incorporated by reference to Exhibit B of the Partnership’s Prospectus dated May 1, 2008, as filed with the Securities and Exchange Commission pursuant to Rule 424 (b)(3) under the Securities Act of 1933 on May 8, 2008.
10.13		Escrow Agreement, dated as of July 25, 2007, among The Bank of New York, the General Partner, and Morgan Stanley & Co. Incorporated, is incorporated by reference to Exhibit 10.13 of the Partnership’s Form 8-K (File No. 0-26340) filed with the Securities and Exchange Commission on July 31, 2007.
10.14		Form of Subscription Agreement Update Form to be executed by purchasers of Units is incorporated by reference to Exhibit C of the Partnership’s Prospectus, dated May 1, 2008, filed with the Securities and Exchange Commission pursuant to Rule 424(b)(3) under the Securities Act of 1933 on May 8, 2008.
10.15		Amended and Restated Customer Agreement between the Partnership and Morgan Stanley DW, dated as of October 16, 2000, is incorporated by reference to Exhibit 10.01 of the Partnership’s Form 8-K (File No. 0-26340) filed with the Securities and Exchange Commission on November 1, 2001.
10.15(a)		Amendment No. 1 to the Amended and Restated Customer Agreement between the Partnership and Morgan Stanley DW Inc., dated July 1, 2005, is incorporated by reference to Exhibit 10.15(a) of the Partnership’s Form 10-Q (File No. 0-26340) filed with the Securities and Exchange Commission on August 12, 2005.
10.16		Commodity Futures Customer Agreement between MS&Co. and the Partnership, and acknowledged and agreed to by Morgan Stanley DW, dated as of June 6, 2000, is incorporated by reference to Exhibit 10.02 of the Partnership’s Form 8-K (File No. 0-26340) filed with the Securities and Exchange Commission on November 1, 2001.
10.17		Customer Agreement between the Partnership and MSIP, dated as of May 1, 2000, is incorporated by reference to Exhibit 10.04 of the Partnership’s Form 8-K (File No. 0-26340) filed with the Securities and Exchange Commission on November 1, 2001.
10.18		Foreign Exchange and Options Master Agreement between MS&Co. and the Partnership, dated as of April 30, 2000, is incorporated by reference to Exhibit 10.05 of the Partnership’s Form 8-K (File No. 0-26340) filed with the Securities and Exchange Commission on November 1, 2001.
10.19		Securities Account Control Agreement between the Partnership and MS&Co., dated as of May 1, 2000, is incorporated by reference to Exhibit 10.03 of the Partnership’s Form 8-K (File No. 0-26340) filed with the Securities and Exchange Commission on November 1, 2001.

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10.20		Management Agreement, dated as of October 9, 2007, among the Partnership, the General Partner, and Altis Partners (Jersey) Limited, is incorporated by reference to Exhibit 10.20 of the Partnership’s Form 8-K (File No. 0-26340) filed with the Securities and Exchange Commission on October 15, 2007.
10.20(a)		Amendment No. 1 to Management Agreement among the Partnership, the General Partner, and Altis Partners (Jersey) Limited, dated as of July 28, 2008, is incorporated by reference to Exhibit 10.20(a) of the Partnership’s Form 8-K (File No. 0-26340) filed with the Securities and Exchange Commission on August 1, 2008.
10.22		Management Agreement, dated as of October 9, 2007, among the Partnership, the General Partner, and C-View International Limited, is incorporated by reference to Exhibit 10.22 of the Partnership’s Form 8-K (File No. 0-26340) filed with the Securities and Exchange Commission on October 15, 2007.
13.01		December 31, 2011 Annual Report to Limited Partners is filed herewith.
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 101.CAL^ XBRL Taxonomy Extension Calculation Linkbase 101.DEF^ XBRL Taxonomy Extension Definition Linkbase 101.LAB^ XBRL Taxonomy Extension Label Linkbase 101.PRE^ XBRL Taxonomy Extension Presentation Linkbase ^ 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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