10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2013 or

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

For the transition period from __________________to__________________

Commission file number: 000-26282

MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

(Exact name of registrant as specified in its charter)

	Delaware	13-3775071
	(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Ceres Managed Futures LLC
522 Fifth Avenue, 14th Floor
New York, NY		10036
(Address of principal executive offices)		(Zip Code)

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x  No o

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

Yes x  No o

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

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

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

As of September 30, 2013, 2,943,012.703 Limited Partnership Units were outstanding.

MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

September 30, 2013

	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Statements of Financial Condition as of September 30, 2013 and December 31, 2012	2
	Condensed Schedule of Investments as of September 30, 2013	3
	Condensed Schedule of Investments as of December 31, 2012	4
	Statements of Income and Expenses for the Three and Nine Months Ended September 30, 2013 and 2012	5
	Statements of Changes in Partners’ Capital for the Nine Months Ended September 30, 2013 and 2012	6
	Notes to Financial Statements	7-24
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25-35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35-42
Item 4.	Controls and Procedures	42-43
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	44-54
Item 1A.	Risk Factors	55
Item 4.	Mine Safety Disclosures	55
Item 6.	Exhibits	55-56

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

	September 30,	December 31,
	2013	2012
ASSETS	$	$
Trading Equity:
Unrestricted cash	42,896,155	57,406,016
Restricted cash	5,169,431	6,014,943
Total cash	48,065,586	63,420,959
Net unrealized gain (loss) on open contracts (MS&Co.)	(22,838)	1,617,474
Total Trading Equity	48,042,748	65,038,433
Interest receivable (MS&Co)	371	1,952
Total Assets	48,043,119	65,040,385
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
Redemptions payable	624,683	1,338,507
Accrued brokerage fees (MS&Co.)	246,421	321,906
Accrued management fees	61,605	80,476
Total Liabilities	932,709	1,740,889
Partners’ Capital:
Limited Partners (2,943,012.703 and 3,508,314.701 Units, respectively)	46,541,739	62,561,958
General Partner (35,959.223 and 41,359.223 Units, respectively)	568,671	737,538
Total Partners’ Capital	47,110,410	63,299,496
Total Liabilities and Partners’ Capital	48,043,119	65,040,385
NET ASSET VALUE PER UNIT	15.81	17.83

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

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

CONDENSED SCHEDULE OF INVESTMENTS

September 30, 2013 (Unaudited)

Futures and Forward Contracts Purchased	Net unrealized gain/(loss) on open contracts	% of     Partners’ Capital
	$
Commodity	(278,433)	(0.59)
Equity	(141,580)	(0.30)
Foreign currency	308,956	0.66
Interest rate	227,676	0.48
Total Futures and Forward Contracts Purchased	116,619	0.25
Futures and Forward Contracts Sold
Commodity	127,199	0.27
Equity	1,530	– (1)
Foreign currency	(199,538)	(0.42)
Interest rate	(903,606)	(1.92)
Total Futures and Forward Contracts Sold	(974,415)	(2.07)
Unrealized Currency Gain	834,958	1.77
Net fair value	(22,838)	(0.05)

(1)  Amounts less than 0.005%

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

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

CONDENSED SCHEDULE OF INVESTMENTS

December 31, 2012

Futures and Forward Contracts Purchased	Net unrealized gain/(loss) on open contracts	% of      Partners’ Capital
	$
Commodity	(162,622)	(0.26)
Equity	696,764	1.10
Foreign currency	(141,431)	(0.22)
Interest rate	43,678	0.07
Total Futures and Forward Contracts Purchased	436,389	0.69
Futures and Forward Contracts Sold
Commodity	131,102	0.21
Equity	(7,075)	(0.01)
Foreign currency	261,013	0.41
Interest rate	(6,928)	(0.01)
Total Futures and Forward Contracts Sold	378,112	0.60
Unrealized Currency Gain	802,973	1.27
Net fair value	1,617,474	2.56

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

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

STATEMENTS OF INCOME AND EXPENSES

(Unaudited)

	For the Three Months   Ended September  30,		For the Nine Months  Ended September 30,
	2013	2012	2013	2012
	$	$	$	$
INVESTMENT INCOME
Interest income (MS&Co. & Morgan Stanley Wealth Management)	2,788	13,999	17,341	32,789
EXPENSES
Brokerage fees (MS&Co.)	778,565	1,182,843	2,581,682	3,902,473
Management fees	194,641	295,711	645,421	1,166,455
Total Expenses	973,206	1,478,554	3,227,103	5,068,928
NET INVESTMENT LOSS	(970,418)	(1,464,555)	(3,209,762)	(5,036,139)
TRADING RESULTS
Trading profit (loss):
Net realized	(413,837)	(3,632,579)	(1,326,172)	(88,313)
Net change in unrealized	(3,022,936)	1,622,925	(1,640,312)	(2,522,906)
Total Trading Results	(3,436,773)	(2,009,654)	(2,966,484)	(2,611,219)
NET LOSS	(4,407,191)	(3,474,209)	(6,176,246)	(7,647,358)
NET LOSS ALLOCATION
Limited Partners	(4,355,744)	(3,442,250)	(6,107,387)	(7,562,060)
General Partner	(51,447)	(31,959)	(68,859)	(85,298)
NET LOSS  PER UNIT *
Limited Partners	(1.44)	(0.91)	(2.02)	(1.95)
General Partner	(1.44)	(0.91)	(2.02)	(1.95)
	Units	Units	Units	Units
WEIGHTED AVERAGE NUMBER
OF UNITS OUTSTANDING	3,086,619.119	3,934,900.850	3,259,117.616	4,172,568.130

* Based on change in net asset value per Unit.

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

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

For the Nine Months Ended September 30, 2013 and 2012

(Unaudited)

	Units of
	Partnership	Limited	General
	Interest	Partners	Partner	Total
		$	$	$
Partners’ Capital,
December 31, 2012	3,549,673.924	62,561,958	737,538	63,299,496
Net Loss	–	(6,107,387)	(68,859)	(6,176,246)
Redemptions	(570,701.998)	(9,912,832)	(100,008)	(10,012,840)
Partners’ Capital,
September 30, 2013	2,978,971.926	46,541,739	568,671	47,110,410
Partners’ Capital,
December 31, 2011	4,476,439.147	92,674,799	1,070,769	93,745,568
Net Loss	–	(7,562,060)	(85,298)	(7,647,358)
Redemptions	(670,366.026)	(13,616,521)	(200,012)	(13,816,533)
Partners’ Capital,
September 30, 2012	3,806,073.121	71,496,218	785,459	72,281,677

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

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

NOTES TO FINANCIAL STATEMENTS

September 30, 2013

(Unaudited)

The unaudited financial statements contained herein include, in the opinion of management, all adjustments necessary for a fair presentation of the financial condition and results of operations of Morgan Stanley Smith Barney Charter Aspect L.P. (the “Partnership”).  The financial statements and condensed notes herein should be read in conjunction with the Partnership’s Annual Report on Form   10-K for the fiscal year ended December 31, 2012 (the “Form 10-K”).

1.  Organization

Morgan Stanley Smith Barney Charter Aspect L.P. is a Delaware limited partnership organized in 1993 to engage primarily in the speculative trading of futures contracts, options on futures and forward contracts, and forward contracts on physical commodities and other commodity interests, including, but not limited to, foreign currencies, financial instruments, metals, energy, and agricultural products (collectively, “Futures Interests”) (refer to Note 4. Financial Instruments).  The Partnership is one of the Morgan Stanley Charter series of funds, comprised of the Partnership, Morgan Stanley Smith Barney Charter WNT L.P., and Morgan Stanley Smith Barney Charter Campbell L.P. (collectively, the “Charter Series”).

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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 Morgan Stanley Smith Barney Holdings LLC (“MSSBH”).  MSSBH is wholly-owned indirectly by Morgan Stanley.  Prior to June 2013, Citigroup Inc. was the indirect minority owner of MSSBH.  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 commodity broker for the Partnership.  Morgan Stanley Wealth Management is a principal subsidiary of MSSBH.

The clearing commodity broker is Morgan Stanley & Co. LLC (“MS&Co.”).   MS&Co. also acts as the counterparty on all trading of foreign currency forward contracts.  MS&Co. is a wholly-owned subsidiary of Morgan Stanley.  Aspect Capital Limited (“Aspect” or the “Trading Advisor”) is the trading advisor to the Partnership.

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2.   Financial Highlights

Financial Highlights for the three and nine months ended September 30, 2013 and 2012 were as follows:

For the Three Months                                                        For the Nine Months                                     

Ended September 30,                                                          Ended September 30,                                      

	2013	2012	2013	2012
Per Unit operating performance:
Net asset value at the beginning of the period:	$     17.25	$     19.90	$     17.83	$     20.94
Interest Income	–  (3)	–  (3)	0.01	0.01
Expenses	(0.32)	(0.38)	(1.00)	(1.23)
Realized/Unrealized Loss (1)	(1.12)	(0.53)	(1.03)	(0.73)
Net Loss	(1.44)	(0.91)	(2.02)	(1.95)
Net asset value, September 30:	$     15.81	$     18.99	$      15.81	$     18.99
Ratios to average net assets:
Net Investment Loss  (2)	(7.8)%	(7.6)%	(7.7)%	(8.0)%
Expenses before Incentive Fees (2)	7.8%	7.7%	7.8%	8.0%
Expenses after Incentive Fees (2)	7.8%	7.7%	7.8%	8.0%
Net Loss  (2)	(35.3)%	(18.1)%	(14.9)%	(12.1)%
Total return before incentive fees	(8.3)%	(4.6)%	(11.3)%	(9.3)%
Total return after incentive fees	(8.3)%	(4.6)%	(11.3)%	(9.3)%

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

(2) Annualized (except for incentive fees if applicable).

(3) Amounts less than $0.005 per Unit.

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3.  Related Party Transactions

The Partnership’s cash is on deposit in commodity brokerage accounts with Morgan Stanley.  Monthly, MS&Co. pays the Partnership interest income on 100% of the average daily equity maintained in cash in the Partnership’s account during each month at a rate equal to 80% of the monthly average of the 4-week U.S. Treasury bill discount rate.  MS&Co. retains any interest earned in excess of the interest paid by MS&Co. to the Partnership.  For purposes of such interest payments, net assets do not include monies due to the Partnership on Futures Interests that have not been received.  The Partnership pays a flat rate brokerage fee to MS&Co.

4.  Financial Instruments

The Partnership trades Futures Interests.  Futures and forwards represent contracts for delayed delivery of an instrument at a specified date and price.  Futures Interests are open commitments until the settlement

date, at which time they are realized.  They are valued at fair value, generally on a daily basis, and the unrealized gains and losses on open contracts (the difference between contract trade price and market price) are reported in the Statements of Financial Condition as a net unrealized gain or loss on open contracts.  The resulting net change in unrealized gains and losses is reflected in the “Net change in unrealized” trading profit (loss) on open contracts from one period to the next on the Statements of Income and Expenses.  The fair value of exchange-traded futures, options and forward contracts is determined by the various futures exchanges, and reflects the settlement price for each contract as of the close of business on the last business day of the reporting period.  The fair value of foreign currency

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

forward contracts is extrapolated on a forward basis from the spot prices quoted as of approximately 3:00 P.M. (E.T.) of the last business day of the reporting period from various exchanges.  The fair value of non-exchange-traded foreign currency option contracts is calculated by applying an industry standard model application for options valuation of foreign currency options, using as input the spot prices, interest rates, and option implied volatilities quoted as of approximately 3:00 P.M. (E.T.) on the last business day of the reporting period.  Risk arises from changes in the value of these contracts and the potential inability of counterparties to perform under the terms of the contracts.  There are numerous factors which may significantly influence the fair value of these contracts, including interest rate volatility.

The fair value of exchange-traded contracts is based on the settlement price quoted by the exchange on the day with respect to which fair value is being determined.  If an exchange-traded contract could not have been liquidated on such day due to the operation of daily limits or other rules of the exchange, the settlement price will be equal to the settlement price on the first subsequent day on which the contract could be liquidated.  The fair value of off-exchange-traded contracts is based on the fair value quoted by the counterparty.

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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

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

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

3)   Terms that require or permit net settlement.

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

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

	Net Unrealized Gains (Losses) on Open Contracts			Longest Maturities
Date	Exchange-Traded	Off-Exchange-Traded	Total	Exchange-Traded	Off-Exchange-Traded
	$	$	$
Sep. 30, 2013	(134,218)	111,380	(22,838)	Mar. 2016	Dec. 2013
Dec. 31, 2012	1,517,757	99,717	1,617,474	Jun. 2015	Jan. 2013

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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

The Partnership also has credit risk because MS&Co. acts as the futures commission merchant or the counterparty, with respect to most of the Partnership’s assets. Exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts are fair valued on a daily basis, with variations in value settled on a daily basis. MS&Co., which is acting as a commodity futures broker for the Partnership’s exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts, is required, pursuant to regulations of the Commodity Futures Trading Commission (“CFTC”), to segregate from its own assets, and for the sole benefit of its commodity customers, total cash held by it with respect to exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts, including an amount equal to the net unrealized gains (losses) on all open exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts, which, in the aggregate, totaled $47,931,368 and $64,938,716 at September 30, 2013 and December 31, 2012, respectively.  With respect to the Partnership’s off-exchange-traded forward currency contracts, there are no daily settlements of variation in value, nor is there any requirement that an amount equal to

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

the net unrealized gains (losses) on such contracts be segregated.  However, the Partnership is required to meet margin requirements equal to the net unrealized loss on open forward currency contracts in the Partnership accounts with the counterparty, which is accomplished by daily maintenance of the cash balance in a custody account held at MS&Co. for the benefit of MS&Co. With respect to those off-exchange-traded forward currency contracts, the Partnership is at risk to the ability of MS&Co., the sole counterparty on all such contracts, to perform. The Partnership has a master netting agreement with MS&Co.  The primary terms are based on industry standard master agreements.  This agreement, which seeks to reduce both the Partnership’s and MS&Co.’s exposure on off-exchange-traded forward currency contracts, should materially decrease the Partnership’s credit risk in the event of MS&Co.’s bankruptcy or insolvency.

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

The futures, forwards and options traded by the Partnership involve varying degrees of related market risk.  Market risk is often dependent upon changes in the level or volatility of interest rates, exchange

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

rates, and prices of financial instruments and commodities, factors that result in frequent changes in the fair value of the Partnership’s open positions, and consequently in its earnings, whether realized or unrealized, and cash flow.  Gains and losses on open positions of exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts are settled daily through variation margin.  Gains and losses on off-exchange-traded forward currency contracts are settled upon termination of the contract.  Gains and losses on off-exchange-traded forward currency options contracts are settled on an agreed-upon settlement date.

5.  Derivatives and Hedging

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

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

On January 1, 2013, the Partnership adopted Accounting Standards Update (“ASU”) 2011-11, “Disclosure about Offsetting Assets and Liabilities” and ASU 2013-01, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”.  ASU 2011-11 created a new disclosure requirement about the nature of an entity’s rights to setoff and the related arrangements associated with its financial instruments and derivative instruments, while ASU 2013-01 clarified 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 accounting principles generally accepted in the United States of America (“U.S. GAAP”) and those entities that prepare their financial statements on the basis of International Financial Reporting Standards. The new guidance did not have a significant impact on the Partnership’s financial statements.

The following tables summarize the valuation of the Partnership’s investments as of September 30, 2013 and December 31, 2012, respectively.

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Offsetting of Derivative Assets and Liabilities as of September 30, 2013:

	Gross Amounts Recognized	Gross Amounts Offset in the  Statement of Financial Condition	Net Amounts Presented in the  Statement of Financial Condition
	$	$	$
Assets
Futures	424,181	(611,981)	(187,800)
Forwards	336,142	(31,723)	304,419
Total Assets	760,323	(643,704)	116,619
Liabilities
Futures	434,811	(1,216,187)	(781,376)
Forwards	9,365	(202,404)	(193,039)
Total Liabilities	444,176	(1,418,591)	(974,415)
Unrealized currency gain			834,958
Total net unrealized loss on
open contracts			(22,838)

Offsetting of Derivative Assets and Liabilities as of December 31, 2012:

	Gross Amounts Recognized	Gross Amounts Offset in the  Statement of Financial Condition	Net Amounts Presented in the  Statement of Financial Condition
	$	$	$
Assets
Futures	1,295,413	(720,472)	574,941
Forwards	209,506	(348,058)	(138,552)
Total Assets	1,504,919	(1,068,530)	436,389
Liabilities
Futures	521,699	(381,857)	139,842
Forwards	425,366	(187,096)	238,270
Total Liabilities	947,065	(568,953)	378,112
Unrealized currency gain			802,973
Net unrealized gain on
open contracts			1,617,474

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The Effect of Trading Activities on the Statements of Financial Condition as of September 30, 2013:

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 nine months    (absolute quantity)
	$	$	$	$	$
Commodity	51,438	(329,871)	433,281	(306,082)	(151,234)	936
Equity	120,614	(262,194)	1,530	–	(140,050)	561
Foreign currency	340,679	(31,723)	9,365	(208,903)	109,418	803
Interest rate	247,592	(19,916)	–	(903,606)	(675,930)	1,522
Total	760,323	(643,704)	444,176	(1,418,591)	(857,796)
Unrealized currency gain					834,958
Total net unrealized loss on open contracts					(22,838)

The Effect of Trading Activities on the Statements of Financial Condition as of December 31, 2012:

Futures and Forward Contracts	Long Unrealized Gain	Long Unrealized Loss	Short Unrealized Gain	Short Unrealized Loss	Net  Unrealized Gain/(Loss)	Average number of contracts outstanding for the year (absolute quantity)
	$	$	$	$	$
Commodity	146,738	(309,360)	497,636	(366,534)	(31,520)	858
Equity	731,889	(35,125)	–	(7,075)	689,689	592
Foreign currency	215,614	(357,045)	448,109	(187,096)	119,582	936
Interest rate	410,678	(367,000)	1,320	(8,248)	36,750	2,731
Total	1,504,919	(1,068,530)	947,065	(568,953)	814,501
Unrealized currency gain					802,973
Net unrealized gain on open contracts					1,617,474

The following tables summarize the net trading results of the Partnership for the three and nine months ended September 30, 2013 and 2012, respectively.

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The Effect of Trading Activities on the Statements of Income and Expenses for the Three and Nine Months Ended September 30, 2013 included in Total Trading Results:

	For the Three Months	For the Nine Months
	Ended September 30, 2013	Ended September 30, 2013
Type of Instrument	$	$
Commodity	(2,537,638)	(258,887)
Equity	367,650	3,054,049
Foreign currency	(409,100)	(1,759,590)
Interest rate	(858,721)	(4,034,042)
Unrealized currency gain	1,036	31,986
Total	(3,436,773)	(2,966,484)

Line Items on the Statements of Income and Expenses for the Three and Nine Months Ended September 30, 2013:

	For the Three Months	For the Nine Months
	Ended September 30, 2013	Ended September 30, 2013
Trading Results	$	$
Net realized	(413,837)	(1,326,172)
Net change in unrealized	(3,022,936)	(1,640,312)
Total Trading Results	(3,436,773)	(2,966,484)

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

	For the Three Months	For the Nine Months
	Ended September 30, 2012	Ended September 30, 2012
Type of Instrument	$	$
Commodity	(2,690,378)	(1,850,378)
Equity	(745,518)	(2,835,325)
Foreign currency	672,460	(1,811,920)
Interest rate	779,189	3,929,390
Unrealized currency loss	(25,407)	(42,986)
Total	(2,009,654)	(2,611,219)

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

	For the Three Months	For the Nine Months
	Ended September 30, 2012	Ended September 30, 2012
Trading Results	$	$
Net realized	(3,632,579)	(88,313)
Net change in unrealized	1,622,925	(2,522,906)
Total Trading Results	(2,009,654)	(2,611,219)

- 19 -

MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6.  Fair Value Measurements and Disclosures

On October 1, 2012, the FASB issued ASU 2012-04, “Technical Corrections and Improvements”, which makes minor technical corrections and clarifications to ASC 820, “Fair Value Measurements and Disclosures”. When the FASB issued Statement 157 (codified in ASC 820), it conformed the use of 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 after December 15, 2012. The adoption of this ASU did not have a significant impact on the Partnership’s financial statements.

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

- 20 -

MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

credit risk); and Level 3 – unobservable inputs for the asset or liability (including the Partnership’s own assumptions used in determining the fair value of investments).

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

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

September 30, 2013	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	858,992	–	n/a	858,992
Forwards	–	345,507	n/a	345,507
Total Assets	858,992	345,507	n/a	1,204,499
Liabilities
Futures	1,828,168	–	n/a	1,828,168
Forwards	–	234,127	n/a	234,127
Total Liabilities	1,828,168	234,127	n/a	2,062,295
Unrealized currency gain				834,958
*Net fair value	(969,176)	111,380	n/a	(22,838)

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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	1,817,113	–	n/a	1,817,113
Forwards	–	634,871	n/a	634,871
Total Assets	1,817,113	634,871	n/a	2,451,984
Liabilities
Futures	1,102,329	–	n/a	1,102,329
Forwards	–	535,154	n/a	535,154
Total Liabilities	1,102,329	535,154	n/a	1,637,483
Unrealized currency gain				802,973
*Net fair value	714,784	99,717	n/a	1,617,474

* This amount comprises the “Net unrealized gain (loss) on open contracts” on the Statements of Financial Condition.

During the period January 1, 2013 to September 30, 2013, and the twelve months ended December 31, 2012, there were no Level 3 assets and liabilities, and there were no transfers of assets or liabilities between Level 1 and Level 2.

7.  Other Pronouncements

In June 2013, the FASB issued ASU 2013-08, “Financial Services – Investments Companies (Topic 946): Amendments to the Scope, Measurement and Disclosure Requirements”.  ASU 2013-08

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

changes the approach to the investment company assessment, requires non-controlling ownership interests in other investment companies to be measured at fair value, and requires additional disclosures about the investment company’s status as an investment company.  The amendments are effective for interim and annual reporting periods beginning after December 15, 2013.  The Partnership is currently evaluating the impact this pronouncement would have on the financial statements.

8.  Restricted and Unrestricted Cash

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

9.  Income Taxes

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

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MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.

NOTES TO FINANCIAL STATEMENTS (CONCLUDED)

The guidance issued by the FASB on income taxes clarifies the accounting for uncertainty in income taxes recognized in the Partnership's financial statements, and prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken.  The Partnership has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements as of September 30, 2013 and December 31, 2012.  If applicable, the Partnership recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in other expenses in the Statements of Income and Expenses. Generally, the 2010 through 2012 tax years remain subject to examination by U.S. federal and most state tax authorities.  No income tax returns are currently under examination.

10.  Subsequent Events

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

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

As of September 30, 2013, the percentage of assets allocated to each market sector was approximately as follows: Interest Rate 20.77%; Currency 26.14%; Equity 27.02%; and Commodity 26.07%.

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

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

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

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

As of September 30, 2013, approximately 74.08% of the Partnership’s total investment exposure is futures contracts which are exchange-traded while approximately 25.92% is forward contracts which are off-exchange traded.

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

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

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

Results of Operations

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

The Trading Advisor trades the Partnership’s assets in accordance with its Diversified Program, a proprietary, systematic trading system.  The Diversified Program is a proprietary, systematic global futures trading program.  Its goal is the generation of significant long-term capital growth independent of stock and bond market returns.  This program continuously monitors price movements in a wide range of global financial, currency and commodity markets, searching for profit opportunities over periods ranging from a few hours to several months.

The Trading Advisor has designed the Diversified Program to have broad market diversification (subject to liquidity constraints).  Aspect’s quantitative resources are sufficient to enable it to design and implement a broadly diversified portfolio with a significant allocation to numerous different markets.

The Trading Advisor’s Diversified Program trades over 100 markets in the seven major sectors:  currencies, energy, metals, stock indices, bonds, agricultural commodities and interest rates

- 27 -

implementing momentum strategies.  Aspect is constantly examining new liquid and uncorrelated markets to incorporate in the program with the aim of improving its reward/risk ratio and capacity.  Aspect has no market or sector preferences, believing that allowing for liquidity effects, equal profitability can be achieved in the long-term in all markets.  The key factors in determining the asset allocation are correlation and liquidity.  Correlations are analyzed at the sector, sub-sector, economic block and market levels to design a portfolio which is highly diversified.

The following presents a summary of the Partnership’s operations for the three and nine months ended September 30, 2013 and 2012, and a general discussion of its trading activities during each period.  It is important to note, however, that the Trading Advisor trades 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 Advisor 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 Advisor’s trading activities on behalf of the Partnership during the period in question.  Past performance is no guarantee of future results.

The Partnership’s results of operations set forth in the financial statements on pages 2 through 24 of this report are prepared in accordance with U.S. GAAP, which requires the use of certain accounting policies that affect the amounts reported in these financial statements, including the following: the contracts the Partnership trades are accounted for on a trade-date basis and marked to market on a daily basis.  The difference between their original contract value and market value is recorded on the Statements of Income and Expenses as “Net change in unrealized” trading profit (loss) for open contracts, and recorded

- 28 -

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.

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

For the Three and Nine Months Ended September 30, 2013

The Partnership recorded total trading results including interest income totaling $(3,433,985) and expenses totaling $973,206, resulting in a net loss of $4,407,191 for the three months ended September 30, 2013.  The Partnership’s net asset value per Unit decreased from $17.25 at June 30, 2013 to $15.81 at September 30, 2013.

During the third quarter, the Partnership posted a loss in net asset value per Unit as losses in global interest rates, metals, energies, currencies, and agriculturals more than offset gains in the global stock indices markets. The most significant losses were incurred within the global interest rate sector as speculation that the U.S. would curtail its quantitative easing program caused interest rate futures prices to whipsaw with no clear direction. Within the metals complex, losses were recorded during August from short positions in industrial and precious metals futures as industrial metals prices

- 29 -

increased due to improving manufacturing data from China, while uncertainty over the fate of monetary stimulus programs in the U.S. bolstered precious metals. Additional losses were recorded in the energy sector during July and September from trading futures positions in crude oil and its distilled products. In July, losses were incurred from short heating oil and gas oil futures positions as new Middle East tensions, early month inventory draws, and favorable U.S. economic data pushed prices higher. During September, losses were incurred from long crude oil and gasoline futures as prices declined after tensions in the Middle East eased and on concerns of reduced future oil demand. Within the currency sector, Federal Open Market Committee Chairman Ben Bernanke’s dovish reassurances in July pushed back concerns regarding the tapering of quantitative easing programs, causing the U.S. dollar to decrease in value against the euro. In August, losses in this sector were from short British pound positions as the currency benefited from positive manufacturing data in the U.K. and a strengthening economy. Within the agriculturals sector losses were recorded in July and August for short cocoa and soybean futures positions. During July, prices of cocoa futures advanced as bean processing in Asia unexpectedly increased, signaling higher demand for the commodity. In August, losses were incurred from short soybean futures positions as prices climbed higher amid hot weather in the U.S. and concern of lower crop yield.  A portion of the Partnership’s losses for the quarter was offset by gains achieved primarily during July and September within the global stock index sector from long positions in U.S. and Asian equity index futures as prices advanced on news of positive employment figures in Europe and the U.S. Federal Reserve’s decision not to curtail its monthly bond purchasing program.

- 30 -

The Partnership recorded total trading results including interest income totaling $(2,949,143) and expenses totaling $3,227,103, resulting in a net loss of $6,176,246 for the nine months ended September 30, 2013.  The Partnership’s net asset value per Unit decreased from $17.83 at December 31, 2012 to $15.81 at September 30, 2013.

During the first nine months of the year, the Partnership posted a loss in net asset value per Unit as losses in global interest rates, energies, and currencies offset gains recorded in the global stock index, metals and agricultural markets. The most significant losses were incurred within the global interest rate sector during May from long positions in U.S. and European interest rate futures as prices declined due to speculation the U.S. Federal Reserve Bank would curb stimulus measures. Similar speculation during the third quarter within this sector continued to cause losses as prices whipsawed. Within the energy complex, losses were incurred in all but two months so far this year as geopolitical tensions and shifting macro-economic data caused crude oil futures prices to fluctuate with no clear trend. Within the currency markets, losses were incurred primarily in February, May, June and August. In February, losses were incurred from long euro positions as the value of the euro declined versus the U.S. dollar after partial election results in Italy suggested political impasse in the nation and indicated a potential deepening of Europe’s debt crisis. In May and June, losses were incurred when the New Zealand and Australian dollars fell against the U.S. dollar, causing losses for the Fund after it was revealed that the Reserve Bank of New Zealand had taken steps to curb currency strength and the Reserve Bank of Australia cut interest rates. During August, losses were recorded from short British pound positions as the currency benefited from positive manufacturing data in the U.K. and a strengthening economy. The Partnership’s losses during the first nine months of the year were partially offset by gains achieved within the global stock index markets during January from long

- 31 -

positions in U.S., Pacific Rim, and European equity index futures as prices moved higher after German business confidence improved, economic reports in the U.S. and China beat estimates, and a weaker yen boosted Japan’s exports. Additional gains were recorded in this sector during April from long positions in U.S. and European equity index futures as prices rose after gauges of U.S. leading economic indicators and consumer sentiment advanced. Gains were also achieved in stock indices during September. . Additional gains were achieved within the metals sector from short positions in precious and industrial metals futures. The price decline in was attributed to several factors including low or falling inflation readings, concern European central banks will sell gold reserves, outflows from related Exchange Traded Products, and signs of slower global economic growth, especially in China.  Within the agriculturals complex, profits were recorded from short positions in wheat futures as prices fell in February after snowfall in the U.S. Great Plains caused drought concerns. Smaller gains were recorded during the second quarter from short positions in coffee and sugar futures as prices declined.

For the Three and Nine Months Ended September 30, 2012

The Partnership recorded total trading results including interest income totaling $(1,995,655) and expenses totaling $1,478,554, resulting in a net loss of $3,474,209 for the three months ended September 30, 2012.  The Partnership’s net asset value per Unit decreased from $19.90 at June 30, 2012 to $18.99 at September 30, 2012.

The most significant trading losses were incurred within the energy complex during July and August from short futures positions in crude oil and its related products as prices advanced on concern that instability in the Middle East will disrupt energy supplies. Within the metals markets, losses were

- 32 -

recorded during August from short positions in platinum futures as prices rose following violent disturbances at South African mines. Additional metals losses were incurred during September from short futures positions in nickel, aluminum, and zinc as prices moved higher amid signs of increased infrastructure spending by the Chinese government. Losses were also recorded within the global stock index sector during August and September from short positions in European equity index futures as prices rose amid optimism the European Central Bank will win support from policy makers to take steps to ease the euro-area’s debt crisis. A portion of the Partnership’s losses during the third quarter was offset by gains achieved within the global interest rate sector during July from long positions in European and U.S. fixed income futures as prices advanced after reports revealed a decline in German service industries and slower-than-forecast growth in U.S. payrolls, fueling concern the global economic recovery is slowing. Within the currency markets, gains were experienced during July from short positions in the euro versus the Swedish krona, U.S. dollar, and Polish zloty as the value of the euro declined against most of its currency counterparts after European Central Bank President Mario Draghi said the euro-zone still faces risks after policy makers cut interest rates to a record low. Gains were recorded within the agricultural complex during July and August from long futures positions in the soybean complex after prices rose as a heat wave and drought in the U.S. Midwest threatened to limit output.

The Partnership recorded total trading results including interest income totaling $(2,578,430) and expenses totaling $5,068,928, resulting in a net loss of $7,647,358 for the nine months ended September 30, 2012.  The Partnership’s net asset value per Unit decreased from $20.94 at December 31, 2011 to $18.99 at September 30, 2012.

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The most significant trading losses were incurred within the global stock index sector during April and May from long positions in U.S. and European equity index futures as prices declined amid an unexpected rise in the U.S. unemployment rate and weakening economic data from China and Europe. Additional losses were incurred during June from newly established short positions in European equity index futures as prices rose amid optimism about the containment of the European debt crisis. Within the metals markets, losses were experienced during August from short positions in platinum futures as prices rose following violent disturbances at South African mines. During September, short futures positions in nickel, aluminum, and zinc resulted in losses as prices moved higher amid signs of increased infrastructure spending by the Chinese government. Within the currency markets, losses were recorded during March from long positions in the Australian dollar, New Zealand dollar, and South African rand as the value of these commodity-linked currencies fell against the U.S. dollar after concern over earnings in China reduced demand for higher-yielding currency assets. Additional currency losses were experienced during May from long positions in the Canadian dollar, Mexican peso, and South African rand against the U.S. dollar as the value of these “commodity-linked” currencies fell in tandem with commodity prices. Losses were also incurred within the energy sector during May from long futures positions in crude oil and its related products as prices declined after stockpiles rose in the U.S. Additional energy losses were recorded during July and August from short futures positions in crude oil and its related products as prices advanced on concern that instability in the Middle East will disrupt energy supplies. A portion of the Partnership’s losses during the first nine months of the year was offset by gains achieved within the global interest rate sector during January from long positions in U.S. and European fixed income futures as prices advanced amid increased demand for the relative “safety” of government debt on mounting concern about the European sovereign debt crisis. Additional gains were recorded in these markets during

- 34 -

April and May from long positions in European and U.S. fixed income futures as prices advanced after Standard & Poor’s cut Spain’s credit rating and Greece failed to form a unified government, adding to concern central banks and politicians are failing to contain the European debt crisis. During July, long positions in European and U.S. fixed income futures resulted in gains as prices climbed higher on concern the global economic recovery is slowing.

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Introduction

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

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

- 35 -

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

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

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

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

Quantifying the Partnership’s Trading Value at Risk

The following quantitative disclosures regarding the Partnership’s market risk exposures contain “forward-looking statements” within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the

- 36 -

Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (“Exchange Act”)).  All quantitative disclosures in this section are deemed to be forward-looking statements for purposes of the safe harbor, except for statements of historical fact.

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

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

VaR is a measure of the maximum amount which the Partnership could reasonably be expected to lose in a given market sector.  However, the inherent uncertainty of the Partnership’s speculative trading and the recurrence in the markets traded by the Partnership of market movements far exceeding expectations could result in actual trading or non-trading losses far beyond the indicated VaR or 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.

- 37 -

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

The Partnership’s Value at Risk in Different Market Sectors

The following tables indicate the trading VaR associated with the Partnership’s open positions by market category as of September 30, 2013 and December 31, 2012, and the highest, lowest and average values during the three months ended September 30, 2013 and for the twelve months ended December 31, 2012.  All open position trading risk exposures of the Partnership have been included in calculating the figures set forth below. There has been no material change in the trading VaR information previously disclosed in the Form 10-K.

As of September 30, 2013, the Partnership’s total capitalization was approximately $47 million.

September 30, 2013                                                                                                                            

Primary Market		% of Total
Risk Category	VaR	Capitalization
Currency	1,824,129	3.87
Interest Rate	1,449,511	3.08
Equity	1,885,252	4.00
Commodity	1,818,762	3.86
Total	6,977,654	14.81

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    Three Months Ended September 30, 2013                                                                        

Market Sector	High VaR $	Low VaR $	Average VaR* $
Currency	1,980,371	944,353	1,598,844
Interest Rate	2,026,816	1,017,096	1,455,609
Equity	1,885,252	608,543	1,174,963
Commodity	2,819,618	236,336	2,214,870

* Average of month-end VaR.

As of December 31, 2012, the Partnership’s total capitalization was approximately $63 million.

December 31, 2012                                                                                                                              

Primary Market		% of
Risk Category	VaR	Total Capitalization
Currency	$4,475,167	7.07
Interest Rate	1,548,520	2.45
Equity	2,550,206	4.03
Commodity	1,861,037	2.94
Total	$10,434,930	16.49

Twelve Months Ended December 31, 2012                                                                             

Market Sector	High VaR $	Low VaR $	Average VaR* $
Currency	6,467,879	1,524,754	4,295,157
Interest Rate	5,355,824	1,403,848	2,861,156
Equity	2,601,876	848,694	1,823,602
Commodity	4,366,102	1,597,466	3,173,053
*Average of month-end VaR.

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Limitations on Value at Risk as an Assessment of Market Risk

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

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

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

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

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

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

Non-Trading Risk

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

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

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

Qualitative Disclosures Regarding Primary Trading Risk Exposures

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

Qualitative Disclosures Regarding Means of Managing Risk Exposure

The Partnership and the Trading Advisor, 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

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manage market exposure by diversifying the Partnership’s assets among different market sectors through the selection of a commodity trading advisor and by daily monitoring of its performance.  In addition, the Trading Advisor establishes diversification guidelines, often set in terms of the maximum margin to be committed to positions in any one market sector or market-sensitive instrument.

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

Item 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of the management of Ceres, Ceres’ President (Ceres’ principal executive officer) and Chief Financial Officer (Ceres’ principal financial officer) have evaluated the effectiveness of the design and operation of the Partnership’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2013.  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, 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 September 30, 2013.

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Changes in Internal Control over Financial Reporting

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

Limitations on the Effectiveness of Controls

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

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PART II.  OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

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

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

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

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

On June 1, 2011, Morgan Stanley & Co. Incorporated converted from a Delaware corporation to a Delaware limited liability company.  As a result of that conversion, Morgan Stanley & Co. Incorporated is now named Morgan Stanley & Co. LLC (“MS&Co.”).

MS&Co. is a wholly-owned, indirect subsidiary of Morgan Stanley, a Delaware holding company.  Morgan Stanley files periodic reports with the Securities and Exchange Commission as required by the Securities Exchange Act, which include current descriptions of material litigation and material proceedings and investigations, if any, by governmental and/or regulatory agencies or self-regulatory

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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 Securities and Exchange Commission (“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.

MS&Co. is a Delaware corporation with its main business office located at 1585 Broadway, New York, New York 10036.  Among other registrations and memberships, MS&Co. is registered as a futures commission merchant and is a member of the National Futures Association.

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

On June 2, 2009, Morgan Stanley executed a final settlement with the Office of 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.

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On June 5, 2012, the Company consented to and became the subject of an Order Instituting Proceedings Pursuant to Sections 6(c) and 6(d) of the Commodity Exchange Act, as amended, Making Findings and Imposing Remedial Sanctions by the CFTC to resolve allegations related to the 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 CFTC found that from April 2008 through October 2009, the Company violated Section 4c(a) of the Commodity Exchange Act and Commission Regulation 1.38 by executing, processing and reporting numerous off-exchange futures trades to the Chicago Mercantile Exchange (CME) and Chicago Board of Trade (CBOT) as EFRPs in violation of CME and CBOT rules because those trades lacked the corresponding and related cash, over-the-counter (“OTC”) swap, OTC option, or other OTC derivative position.  In addition, the CFTC found that the Company violated CFTC Regulation 166.3 by failing to supervise the handling of the trades at issue and failing to have adequate policies and procedures designed to detect and deter the violations of the Act and Regulations.  Without admitting or denying the underlying allegations and without adjudication of any issue of law or fact, the Company accepted and consented to entry of findings and the imposition of a cease and desist order, a fine of $5,000,000, and undertakings related to public statements, cooperation and payment of the fine.  The Company entered into corresponding and related settlements with the CME and CBOT in which the CME found that the Company violated 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.

On March 15, 2010, the Federal Home Loan Bank of San Francisco filed two complaints against the Company and other defendants in the Superior Court of the State of California. These actions are styled Federal Home Loan Bank of San Francisco v. Credit Suisse Securities (USA) LLC, et al., and

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Federal Home Loan Bank of San Francisco v. Deutsche Bank Securities Inc. et al., respectively. Amended complaints filed on June 10, 2010 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 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 of 1933, as amended, and overruled defendants’ demurrers with respect to all other claims. At September 25, 2013, the current unpaid balance of the mortgage pass-through certificates at issue in these cases was approximately $326 million, and the certificates had incurred actual losses of approximately $4 million. Based on currently available information, the Company believes it could incur a loss for this action up to the difference between the $326 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- 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 July 9, 2010 and February 11, 2011, Cambridge Place Investment Management Inc. filed two separate complaints against the Company and other defendants in the Superior Court of the Commonwealth of Massachusetts, both styled Cambridge Place Investment Management Inc. v. Morgan Stanley & Co., Inc., et al. The complaints assert claims on behalf of certain clients of

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plaintiff’s affiliates and allege 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 in the two matters was approximately $263 million. Plaintiff filed amended complaints on October 14, 2011, which raise claims under the Massachusetts Uniform Securities Act and seek, among other things, to rescind the plaintiff’s purchase of such certificates. Defendants’ motions to dismiss the amended complaints, with respect to plaintiff’s standing to bring suit and for failure to state a claim upon which relief can be granted were denied in March and October 2012, respectively. At September 25, 2013, the current unpaid balance of the mortgage pass-through certificates at issue in these cases was approximately $105 million, and the certificates had incurred actual losses of approximately $109 million. Based on currently available information, the Company believes it could incur a loss for these actions of 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- 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 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 et al., which 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 asserts claims for common law

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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 February 28, 2011, the court presiding over this action denied the Company’s motion to dismiss the complaint and on March 21, 2011, the Company appealed that order.  On July 7, 2011, the appellate court affirmed the lower court’s decision denying the 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 October 15, 2010, the Federal Home Loan Bank of Chicago filed a complaint against the Company and other defendants in the Circuit Court of the State of Illinois styled Federal Home Loan Bank of Chicago v. Bank of America Funding Corporation et al. The complaint alleges that defendants made untrue statements and material omissions in the sale to plaintiff of a number of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sold to plaintiff by the Company in this action was approximately $203 million. The complaint raises claims under Illinois law and seeks, among other things, to rescind the plaintiff’s purchase of such certificates. On March 24, 2011, the court granted plaintiff leave to file an amended complaint. The defendants’ motion to dismiss the amended complaint was denied on September 19, 2012. The Company filed its answer on December 21, 2012.

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At September 25, 2013, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $98 million and certain certificates had incurred actual losses of approximately $1 million. Based on currently available information, the Company believes it could incur a loss in this action up to the difference between the $98 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- 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 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 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 in May 2015. At September 25, 2013, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $119 million, and the certificates had incurred actual losses of approximately $1 million. Based on currently available

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information, the Company believes it could incur a loss in this action up to the difference between the $119 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 post-judgment interest, fees and costs. The Company may be entitled to an offset for interest received by the plaintiff prior to a judgment.

On September 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, 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 United States District Court for the Southern District of New York. 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 September 25, 2013, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $2.8 billion, and the certificates had incurred actual losses of approximately $68 million. Based on currently available information, the Company believes it could incur a loss in this action up to the difference between the $2.8 billion 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- 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.

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On April 25, 2012, Metropolitan Life Insurance Company and certain affiliates filed a complaint against the Company and certain affiliates in the Supreme Court of NY styled Metropolitan Life Insurance Company, et al. v. Morgan Stanley, et al. An amended complaint was filed on June 29, 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 total amount of certificates allegedly sponsored, underwritten and/or sold by the Company was approximately $758 million. The amended complaint raises common law claims of fraud, fraudulent inducement, and aiding and abetting fraud and seeks, among other things, rescission, compensatory and/or rescissionary damages, as well as punitive damages, associated with plaintiffs’ purchases of such certificates. On September 21, 2012, the Company filed a motion to dismiss the amended complaint, which was granted in part and denied in part on July 16, 2013. Defendants filed a notice of appeal of that decision on August 16, 2013. Following that decision, the total amount of certificates allegedly sponsored, underwritten and/or sold by the Company was approximately $656 million. At September 25, 2013, the current unpaid balance of the mortgage pass-through certificates remaining at issue in this case was approximately $324 million, and the certificates incurred actual losses of approximately $35 million. Based on currently available information, the Company believes it could incur a loss up to the difference between the $324 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- 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.

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On April 25, 2012, The Prudential Insurance Company of America and certain affiliates filed a complaint against the Company and certain affiliates in the Superior Court of the State of New Jersey styled The Prudential Insurance Company of America, et al. v. Morgan Stanley, et al. The complaint alleges that defendants made untrue statements and material omissions in connection with the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by the Company is approximately $1 billion. The complaint raises claims under the New Jersey Uniform Securities Law, as well as common law claims of negligent misrepresentation, fraud and tortious interference with contract and seeks, among other things, compensatory damages, punitive damages, rescission and rescissionary damages associated with plaintiffs’ purchases of such certificates. On October 16, 2012, plaintiffs filed an amended complaint which, among other things, increases the total amount of the certificates at issue by approximately $80 million, adds causes of action for fraudulent inducement, equitable fraud, aiding and abetting fraud, and violations of the New Jersey RICO statute, and includes a claim for treble damages. On March 15, 2013, defendants’ motion to dismiss was denied. At September 25, 2013, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $663 million, and the certificates had not yet incurred actual losses. Based on currently available information, the Company believes it could incur a loss in this action up to the difference between the $663 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- 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.

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Item 1A.  RISK FACTORS

There have been no material changes from the risk factors previously referenced in the Partnership’s Report on Form 10-K.

Item 4.  MINE SAFETY DISCLOSURES

Not applicable.

Item 6. EXHIBITS

10.01 Commodity Futures Customer Agreement, between Morgan Stanley & Co. LLC and the Funds listed on Appendix A thereto dated as of November 12, 2013.

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

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

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

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

101.INS* XBRL Instance Document

101.SCH* XBRL Taxonomy Extension Schema Document

101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB* XBRL Taxonomy Extension Label Document

101.PRE* XBRL Taxonomy Extension Presentation Document

101.DEF* XBRL Taxonomy Extension Definition Document

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Notes to Exhibits List

*Submitted electronically herewith.

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

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Morgan Stanley Smith Barney Charter Aspect L.P.
	(Registrant)
	By:	Ceres Managed Futures LLC
		(General Partner)
November 13, 2013	By:	/s/Alice Lonero
		Alice Lonero
		Chief Financial Officer

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

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EX-10.01

Exhibit 10.01

AMENDED AND RESTATED COMMODITY FUTURES CUSTOMER AGREEMENT

This Amended and Restated Commodity Futures Customer Agreement (the “Agreement”), made and entered into as of the date set forth at the end of this Agreement and effective with respect to each Fund as of the date set forth in Appendix A, is entered into in consideration of acceptance by Morgan Stanley & Co. LLC (“Morgan Stanley”), a registered futures commission merchant (“FCM”), of an account or accounts (individually or jointly an “Account”) in the name of each of the funds or accounts listed in a schedule (each such fund or account, a “Customer,” and such schedule the  “Customer Schedule”) to this Agreement attached hereto as Appendix A, as may from time to time be amended, and amends and restates the Commodity Futures Customer Agreement dated as of May 30, 2012.

Each Customer will engage a commodity trading advisor to provide investment advice to Customer (each an “Advisor”). Such Advisor is selected by Ceres Managed Futures LLC, the trading manager of each Customer (“Ceres”).  As of the date hereof, each such Advisor has previously executed a form of the Representations of Advisor in favor of Morgan Stanley which is hereby incorporated by reference, and going forward henceforth, any Advisor selected by Ceres shall execute such form prior to trading in the relevant Account.  The Customer Schedule applicable as of the effective date of this Agreement is set forth in Appendix A hereto.  A form of Customer Schedule by which additional Customers may from time to time be joined as a Customer subject to this Agreement is attached as Appendix B hereto.  The parties agree that Appendix A shall be revised from time to time to reflect the joinder of new Customers under this Agreement whenever any such Customer is so joined under the form set forth in Appendix B.

It is understood and agreed that for ease of administration, this Agreement is being executed so as to enable each fund or account listed on the Customer Schedule hereto to utilize Morgan Stanley as a FCM.  Ceres may add additional Customers to the Customer Schedule without the consent of any other Customer and upon providing notice to Morgan Stanley.  For the avoidance of doubt, each fund or account identified on the Customer Schedule at any time shall be an individual Customer of Morgan Stanley and each shall be deemed to have entered into a separate Agreement with Morgan Stanley.  If any existing Customer is removed from such Customer Schedule at any time, as long as no positions remain open hereunder with respect to such Customer, this Agreement shall be deemed terminated with respect to such Customer and neither such Customer nor Morgan Stanley shall have any further obligations to each other hereunder.  The latest-dated Customer Schedule shall supersede and replace, in all respects, any prior Customer Schedule.

The parties agree that this Agreement shall be treated as if it were a separate agreement with respect to each fund or account listed on the Customer Schedule under the heading “Name of Customer,” as if each such fund or account had executed a separate agreement naming only itself as Customer, and that no fund or account listed on a Customer Schedule shall have any liability under this Agreement for the obligations of any other fund or account listed on the same or another Customer Schedule. For the avoidance of doubt, no Customer has been deemed to have any affiliates under this Agreement.

1. Applicable Law.  The Account and all Contracts, transactions and agreements in respect of the Account shall be subject to the Commodity Exchange Act (“CEA”) and the rules, regulations, rulings, advisories and interpretations of the Commodity Futures Trading Commission (“CFTC”), the National Futures Association (“NFA”), exchanges, contract markets and clearing organizations where any transaction in the Account is executed and/or cleared by Morgan Stanley or Morgan Stanley’s designated agents hereunder.  All such laws, rules, regulations, rulings, advisories and interpretations, as in effect from time to time, are hereinafter collectively referred to as “Applicable Law.”

2. Customer’s Representations and Warranties.  At the time of entering into this Agreement and again upon the entry into any Contracts or transactions under this Agreement, Customer represents, warrants and covenants that (a) Customer has full right, power and authority to enter into this Agreement, and the person executing this Agreement on behalf of Customer is authorized to do so; (b) this Agreement is binding on Customer and enforceable against Customer in accordance with its terms; (c) Customer may lawfully establish and open the Account for the purpose of effecting purchases and sales of Contracts through Morgan Stanley; (d) performance of this Agreement and of transactions entered into pursuant to this Agreement will not violate any Applicable Law to which Customer is subject or any agreement to which Customer is subject or a party, except to the extent such violation does not cause a material adverse effect to the Customer’s business; (e) performance of this Agreement and of transactions entered into pursuant to this Agreement will comply with Customer’s Constitutive Documents, except to the extent such failure to comply does not cause a material adverse effect to the Customer’s business; (f) all of Customer’s information in the Account Application preceding this Agreement (which Application and the information contained therein is hereby incorporated into this Agreement) is true and correct in all material respects and Customer shall promptly notify Morgan Stanley of any material change in such information; (g) if Customer is domiciled or resident in any Province of Canada, Customer is (i) a company or person, other than an individual, that is an “accredited investor” as defined in section 1.1 of National Instrument 45-106 — Prospectus and Registration Exemptions; or (ii) a person or company deemed to be a “designated institution” under subsection 204(1) of Ontario Regulation 1015 — General Regulation made under the Securities Act (Ontario); (h) if Customer is domiciled or resident in the Province of Québec, Canada, Customer is an “accredited counterparty” under Section 3 of the Québec Derivatives Act; (i) to the extent required under Applicable Law as a regulatory prerequisite to the execution or clearing of any Contract for its Account, Customer is an “eligible contract participant” as defined under Section 1a(18) of the CEA and (j) if Customer enters into any OTC agricultural swap transaction for the purpose of clearing such transaction in the Account, Customer is and will remain during the term of any such transaction an eligible swap participant within the meaning of Rule 35.1(b)(2) of the rules of the CFTC (“CFTC Rules”).  “Constitutive Documents” means any (i) incorporating documents, including any articles of incorporation or unanimous shareholders’ agreement, (ii) partnership agreement, (iii) trust deed, agreement or declaration, (iv) by-laws, (v) plan documents, including any statement of investment policies and procedures, in the case of an employee benefit plan, pension plan or master trust in which the assets of a pension plan are invested, and (vi) prospectus or offering memorandum and annual information form, all as applicable, and as amended, replaced, or supplemented from time to time, together with any attachments, schedules, exhibits and documents incorporated by reference.

3. Payment Obligations Of Customer.  Customer shall pay Morgan Stanley upon demand (a) all brokerage charges, give-up fees, commissions and service fees as Morgan Stanley and Customer may from time to time agree; (b) all exchange, clearing house, NFA or other regulatory fees or charges; (c) any tax imposed on Customer’s transactions hereunder by any competent taxing authority; (d) any debit balance or deficiency in the Account, including margin obligations in respect of the Account arising under Section 6(e) hereof; (e) interest on any debit balances or deficiencies in the Account, at rates agreed from time to time between the parties; and (f) any other amounts owed by Customer to Morgan Stanley with respect to the Account or any transactions therein.

Customer agrees to compensate Morgan Stanley and its affiliates, officers, employees, successors, assigns and agents for any and all loss, liability, cost, penalty or tax (each a “Loss” and collectively “Losses”) incurred by Morgan Stanley as a direct result of Customer’s failure to comply with any provision of, or to perform any obligations under, this Agreement in a material way, or as a direct result of the failure of any of its representations, warranties or covenants made hereunder to be true and correct in any material respect; provided however, Customer shall not compensate Morgan Stanley to the extent such Loss is caused by the negligence, fraud or willful misconduct of Morgan Stanley.

4. Customer’s Events Of Default; Morgan Stanley’s Remedies.

(a) Events of Default.   As used herein, any of the following is an “Event of Default”:

(i) the commencement of a proceeding under any bankruptcy, insolvency, arrangement or reorganization regime existing under Applicable Law or the institution of any other relief under bankruptcy or insolvency law or other similar law affecting creditors’ rights, or the filing or presentation of a petition for the appointment of a receiver by or against Customer or for the Customer’s winding up or liquidation, an assignment, arrangement or composition made by Customer with or for the benefit of creditors, Customer becomes insolvent or is unable to pay its debts or fails or makes an admission in writing that it is insolvent or is unable to pay its debts when they mature, or the suspension by Customer of its usual business or any material portion thereof, provided that a proceeding seeking a judgment of insolvency or bankruptcy against Customer that is instituted by a person other than Customer or an affiliate of Customer or a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over the Customer shall constitute an Event of Default hereunder only if, and at such time as, such proceeding results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or is not dismissed or withdrawn within 30 calendar days of being instituted;

(ii) the issuance of any warrant or order of attachment against the Account or the levy of a judgment against the Account;

(iii) Customer (a) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (b) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (c) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or similar official for it or for all or substantially all of its assets; (d) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; (e) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (i), (ii) or (iii) above or (f) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts;

(iv) if Customer is an employee benefit plan or other pension fund (or administrator or trustee of such a plan, fund or master trust in which the fund assets are invested), (A) any step is taken by Customer, any governmental authority or body or regulator, or other person to terminate, wind-up or liquidate Customer, the fund or the plan, in whole or in part; (B) any event or condition occurs or exists that would entitle any court or regulator to require the termination, wind-up or liquidation of Customer, the fund or the plan, in whole or in part, or the termination or close-out of any Contract; (C) Customer is unable to pay benefits under the relevant employment or pension benefit plan when due; (D) Customer or any other person does anything or takes any action or step to merge, consolidate or combine the fund with any other pension fund or its assets, whereby assets are transferred from the fund or are to become available for the payment of any liabilities of the other fund without the consent of Morgan Stanley;

(v) if Customer is a trust or investment fund, (A) any step is taken by Customer or any governmental authority to terminate, wind-up or liquidate Customer or the fund; or (B) any event or condition occurs or exists that would entitle any court or regulator to require the termination, wind-up or liquidation of Customer or the fund or to issue a cease trade order in respect of Customer, in whole or in part, or the termination or close-out of any Contract;

(vi) the failure by Customer to deposit or maintain margin or to pay required premiums in accordance with Section 6(e) hereof, or otherwise to make payments required by Section 3 hereof;

(vii) Customer is in default, or an event of default exists, with respect to any material obligation or liability (including the failure to make a payment on demand or to satisfy margin requirements) arising under any agreement styled as Customer Documents (Eligible Counterparty / Professional Client) (Including Exchange – Traded Derivatives) between Morgan Stanley & Co. International plc and Customer (for the avoidance of doubt, the term “Customer” as used herein shall refer to an individual investment vehicle alone and no affiliates of such vehicle);

(viii) Customer is suspended from membership of, or participation in, any exchange, clearing house or self-regulatory organization, or suspended from dealings in Contracts by any government agency or self-regulatory organization, or by act of any judicial authority;

(ix) Morgan Stanley determines in good faith and a commercially reasonable manner that any material representation or warranty or covenant made by Customer to Morgan Stanley is untrue or inaccurate in any material respect, and following Morgan Stanley providing notice to Customer regarding such representation and Customer failing to cure such matter within three Business Days following such notice; and

(x) the failure by Customer to perform, in any material respect, its other obligations hereunder and following Morgan Stanley providing notice to Customer regarding such performance and Customer failing to cure such matter within three Business Days following such notice.

(b)   Remedies.  Upon the occurrence of an Event of Default, Morgan Stanley shall have the right, in addition to any other remedy available to Morgan Stanley at law or equity, to (i) buy, sell or otherwise liquidate any or all open Contracts held in or for the Account (including without limitation through the making or taking of delivery, the use of exchange-for-physical, exchange-for-swap, exchange-for-risk, exchange-for-options or exchange-for-related-positions transactions, block trades, any associated cash transactions as broker or principal, or any other means); (ii) set off or apply any or all cash margin held in or for the Account to any amount owed by Customer to Morgan Stanley; (iii) sell any or all of the securities or other property of Customer held in or for the Account and to apply the proceeds thereof to any amounts owed by Customer to Morgan Stanley; (iv) borrow or buy any options, securities, Contracts or other property for the Account; or (v) cancel any unfilled orders for the purchase or sale of Contracts for the Account, all without demand for margin and without notice or advertisement and to the full extent permitted under Applicable Law.  In exercising its remedies hereunder, Morgan Stanley may in its sole discretion and without prior notice to Customer (A) straddle or spread open positions in the Account; (B) switch positions to another month, commodity or exchange; (C) close out positions in whole or in part, or limit and/or terminate the right of Customer to trade in the Account, other than for liquidation; (D) sell Contracts to itself or its affiliates or buy Contracts from itself or its affiliates in arms-length transactions; (E) purchase the whole or any part of open positions in the Account free from any right of redemption, and, in each case, Customer shall remain liable for any resulting deficiency.  In the event Morgan Stanley’s position would not be jeopardized thereby, Morgan Stanley will make reasonable efforts under the circumstances to notify Customer prior to taking any such action.  A prior demand or margin call of any kind from Morgan Stanley or prior notice from Morgan Stanley shall not be considered a waiver of Morgan Stanley’s right to take any action without notice or demand.

(c)   Set-off Rights.  Upon the occurrence of an Event of Default, in addition to and not in limitation of any other right or remedy (including any right to set-off, counterclaim, or otherwise withholding of payment) under any agreement or Applicable Law, Morgan Stanley will at its option have the right, at any time and from time to time, without prior notice to Customer, to set-off any sum or obligation (whether or not vested or contingent and whether or not such sum or obligation is then due and payable) owed by Customer to Morgan Stanley against any sum or obligation (whether or not vested or contingent and whether or not such sum or obligation is then due and payable) owed by Morgan Stanley or any affiliate of Morgan Stanley (the “Original Obligation”) to Customer and, for this purpose, may convert one currency into another at the commercially reasonable rates of exchange as determined by Morgan Stanley for the purchase of such other currency from time to time. Any such set-off will automatically satisfy and discharge the Original Obligation to Customer and, if the Original Obligation exceeds the sum or obligation to be set-off against, the Original Obligation will be novated and replaced by an obligation to pay Customer only the excess of the Original Obligation over such sum or obligation.  Customer authorizes Morgan Stanley and its affiliates, on behalf of and in the name of Customer, to do all such acts and to execute all such documents as may be required to effect such application.

5. Limitation Of Liability.  Except as otherwise provided in this Section 5, neither Morgan Stanley nor its affiliates shall have any responsibility or liability to Customer hereunder for, any Losses however caused, incurred or suffered by Customer directly or indirectly (i) in connection with the performance or non-performance, for any reason, by any designated contract market, swaps execution facility, trading facility, clearing house, derivatives clearing organization, executing broker, clearing firm or custodian or by any electronic trading system, facility or service (any such system, facility or service, collectively, “Electronic Trading Services”), or by any other third party of its obligations to Morgan Stanley in respect of or in connection with any Contract provided, however, that Morgan Stanley has picked such party in a commercially reasonable manner; (ii) as a result of any prediction, recommendation or advice made or given by a representative of Morgan Stanley, whether or not made or given at the request of Customer; (iii) as a result of Morgan Stanley’s commercially reasonable reliance on any instruction, notice or communication that it believes to be that of an individual authorized to act on behalf of Customer; (iv) as a result of any delay in the performance or non-performance of any of Morgan Stanley’s obligations hereunder directly or indirectly caused by the occurrence of any contingency beyond the control of Morgan Stanley including, but not limited to, government or exchange suspensions or restrictions on trading or clearing, war, acts of terrorism or natural disasters, or the unscheduled closure of an exchange or contract market or delays in the transmission of orders due to breakdowns or failures of transmission or communication facilities, execution, and/or trading facilities or other systems (including, without limitation, any Electronic Trading Services), it being understood that Morgan Stanley shall be excused from performance of its obligations hereunder for such period of time as is reasonably necessary after such occurrence to remedy the effects therefrom; (v) as a result of any action reasonably taken by or on behalf of Morgan Stanley or its floor brokers in compliance with Applicable Law; or (vi) in connection with or arising out of any agreements relating to Electronic Trading Services provided to Customer by Morgan Stanley (the terms and conditions of which in their entirety are incorporated herein by reference). Further, with respect to any Electronic Trading Services Morgan Stanley expressly disclaims any representation or warranty whatsoever (a) with respect to accuracy, completeness or timeliness of such services, (b) that such services shall be uninterrupted or error free; and (c) including any implied warranties of title, non-infringement, merchantability or fitness for a particular purpose relating to such services; provided however, Morgan Stanley shall be liable to the extent such Loss is caused by the negligence, fraud or willful misconduct of Morgan Stanley. Neither party shall be liable to the other for consequential, incidental, punitive or special damages hereunder, including, without limitation, damages alleged on the basis of lost profits or lost assets, including income-producing assets.

6.           General Agreements.  The parties agree that:

(a) Morgan Stanley’s Responsibility.  Morgan Stanley is not acting as a fiduciary, foundation manager, commodity pool operator, commodity trading advisor or investment adviser in respect of any Account opened by Customer.  Customer is acting for its own account and has made its own independent decisions to effect transactions in Contracts and as to whether each transaction is prudent or appropriate for it based on Customer’s own judgment and upon advice from such advisors as it has deemed necessary.  Customer is solely responsible for any trading decisions including order-routing decisions made by Customer.  Morgan Stanley does not make any recommendation as to where such orders should be executed and does not undertake to notify Customer of price improvement opportunities or more advantageous execution quality at particular exchange venues.  Morgan Stanley shall have no responsibility hereunder for compliance with any law or regulation governing the conduct of fiduciaries, foundation managers, commodity pool operators, commodity trading advisors or investment advisers.

Without limitation of the foregoing (i) Morgan Stanley shall provide the services listed in Appendix C (which may be amended from time to time upon the written mutual consent of Morgan Stanley and each Customer) to each Customer; (ii) Morgan Stanley shall comply with the segregation requirements of Section 4d(a)(2) of the CEA and the CFTC Rules or, if applicable, Part 30 of the CFTC Rules or, with respect to eligible cleared OTC derivatives, the rules of the derivatives clearing organization where such cleared OTC derivatives are cleared, with respect to assets deposited by Customer hereunder; (iii) Morgan Stanley, as appropriate to Customer’s transactions and in accordance with the CEA and CFTC Rules (including Part 30 of such Rules and, as applicable, the rules of relevant derivatives clearing organizations), may place and maintain Customer’s assets to effect Customer’s transactions with another FCM, a clearing organization or a foreign bank (as such terms are defined under Rule 17f-6 under the Investment Company Act of 1940 promulgated by the Securities and Exchange Commission (“SEC”)) or a member of a foreign board of trade, and shall obtain an acknowledgement, as required under CFTC Rules 1.20(a) or 30.7(c) or the rules of relevant derivatives clearing organizations, as applicable, that such assets are held on behalf of Morgan Stanley’s customers in accordance with the provisions of the CEA; (iv) Morgan Stanley shall promptly furnish copies of or extracts from its records or such other information pertaining to Customer’s assets as the SEC through its employees or agents may request; and (v) the parties acknowledge and agree that if at any time Customer’s custodial arrangement in respect of the Account no longer meets the requirements of this section 6(a), Customer shall withdraw its assets from the Account as soon as reasonably practicable.

(b) Advice.  All advice communicated by Morgan Stanley with respect to the Account or transactions effected by Customer hereunder is incidental to the conduct of Morgan Stanley’s business as an FCM and such advice shall not serve as the primary basis for any decision made by or on behalf of Customer.  Morgan Stanley shall have no discretionary authority, power or control over any decisions made by or on behalf of Customer in respect of the Account, regardless of whether Customer relies on the advice of Morgan Stanley in making any such decision.  Customer acknowledges that Morgan Stanley and its managing directors, officers, employees and affiliates may take or hold positions in, or advise other customers concerning, contracts that are from time to time the subject of advice from Morgan Stanley to Customer.  The positions and advice of Morgan Stanley and its managing directors, officers, employees and affiliates may be inconsistent with or contrary to positions of, and the advice given by, Morgan Stanley to Customer.  Customer acknowledges and agrees that Morgan Stanley is not acting hereunder as a municipal advisor within the meaning of Section 975 of the Dodd-Frank Wall Street Reform & Consumer Protection Act.

(c) Recording.   Each party may record, on tape or otherwise, any telephone conversation between Morgan Stanley and Customer involving their respective officers, agents and employees, and each party hereby agrees and consents thereto.

(d)           Acceptance of Orders; Position Limits.

(i) Morgan Stanley shall have the right to limit the size of open positions (net or gross) of Customer with respect to the Account at any time and to refuse acceptance of orders to establish new positions, without regard to whether such refusal or limitation is required by, or based on position limits imposed under, Applicable Law.  Morgan Stanley shall make commercially reasonable efforts to provide Customer with a list of any position limits it intends to apply to the Account. Morgan Stanley shall promptly notify Customer of its rejection of any order.  To the extent permitted by Applicable Law, Morgan Stanley is authorized to combine orders for Customer’s Account with orders for other customers.  Unless specified by Customer, Morgan Stanley may designate the exchange or other markets (including, without limitation, an exchange’s electronic trading platform) on or through which it will attempt to execute orders.

(ii) Customer shall file or cause to be filed all applications or reports required under Applicable Law with the CFTC or the relevant contract market or clearing house, and shall provide Morgan Stanley with a copy of such applications or reports and such other information as Morgan Stanley may reasonably request in connection therewith and in connection with Morgan Stanley’s own regulatory reporting obligations.

(e) Original and Variation Margin; Premiums; Other Contract Obligations.  Customer shall perform all obligations attendant to transactions in Contracts for the Account and shall make, or cause to be made, all applicable original margin, variation margin, intra-day margin and premium payments, in such amount, form and subject to such valuation mechanics, as may be required by Applicable Law or by Morgan Stanley.  Requests for margin deposits and/or premium payments shall be communicated to Customer in writing (including electronic mail); provided that Morgan Stanley reserves the right, in the event that Customer cannot be contacted by electronic means (after a commercially reasonable attempt to contact Customer by electronic means), to communicate such requests orally or telephonically.  For the avoidance of doubt, a statement of margin or premium due set forth on Customer’s daily confirmation of trading activity shall constitute a demand for such margin or premium for the purposes of this Section 6(e).  Customer margin deposits and/or premium payments shall be made by wire transfer in accordance with Morgan Stanley’s instructions to Customer segregated account, secured amount account, sequestered account or cleared swap account, as required under Applicable Law, and shall be in U.S. dollars unless Morgan Stanley agrees otherwise in writing.

In connection with any Customer instruction at any time to Morgan Stanley to (i) satisfy any margin requirement arising under this Section 6(e) or this Agreement by means of a transfer of available funds or securities held in a Morgan Stanley securities margin account or (ii) transfer available excess equity out of the Account to any such securities margin account, Customer acknowledges and agrees that funds and Collateral carried in and for the Account, as well as all Contracts carried in and for the Account (I) are not subject to or afforded protection under SEC Rules 8c-1, 15c2-1, 15c3-2 or 15c3-3 and (II) in the event of Morgan Stanley’s bankruptcy or insolvency, will not be afforded protection under the Securities Investor Protection Act of 1970 and, instead, Customer’s rights shall be determined pursuant to the commodity broker liquidation provisions of the Bankruptcy Code and Part 190 of the CFTC Regulations.

Interest on such funds held in segregated or secured accounts (or other accounts to the extent consented to by Ceres) shall be paid by Morgan Stanley to Customer, at rates agreed from time to time between the parties.

(f) Security Interest and Rights Respecting Collateral.   

(i) Customer hereby assigns, pledges and transfers to Morgan Stanley and grants to Morgan Stanley a security interest in and continuing first priority lien on all of Customer’s right, title and interest in the Account and any and all securities entitlements, securities, funds and other property from time to time credited to the Account, held by Morgan Stanley or any of its affiliates, or carried by others for the Account, whether now owned or existing or hereafter acquired and wherever located and all proceeds of any of the foregoing (collectively, the “Collateral”).  The foregoing grant of security secures, to the extent permissible by Applicable Law, all obligations of Customer now or hereafter owing to Morgan Stanley pursuant this Agreement, including, without limitation, all Losses incurred by Morgan Stanley in connection with the enforcement of this Agreement and the security interest created hereunder.  Upon the occurrence of an Event of Default, Morgan Stanley shall have and may exercise in respect of the Collateral, in addition to all other rights and remedies provided for herein or otherwise available to it pursuant to Applicable Law, at law or in equity, all the rights and remedies of a secured party upon default under Applicable Law, including but not limited to the Uniform Commercial Code (“UCC”), whether or not the UCC applies to the affected Collateral, to the fullest extent permitted under Applicable Law.  Customer agrees to execute any documents reasonably required by Morgan Stanley for the perfection or negotiation of such general lien or security interest.  Customer and Morgan Stanley agree that Morgan Stanley’s use of the Collateral shall at all times be subject to and in accordance with Applicable Law.

(ii) If Customer is resident of or domiciled in, or if any of the Collateral is subject to Applicable Law of, any jurisdiction in which a security interest in the Collateral cannot be created solely by means of Customer’s pledge of such Collateral to Morgan Stanley (or any jurisdiction in which the security interest arising under such a pledge would require local registration in order to be perfected), then the parties agree that, with respect to such a jurisdiction, all right, title and interest in and to the Collateral shall vest via transfer of title in Morgan Stanley free and clear of any liens, claims, charges or encumbrances or any other interest of Customer or of any third party (other than a lien routinely imposed on all securities in a relevant clearance system).

(g) Québec Charge. This section applies only with respect to security interests if their validity is governed by the laws of the Province of Québec.  Customer hereby hypothecates and grants a general lien and a continuing first priority security interest in all Collateral to Morgan Stanley for the amount of USD 1,000,000,000.00, with interest from the date of this Agreement.  Morgan Stanley may sell or take the Collateral in payment without giving prior notice or observing any time limits prescribed in respect of such taking in payment or such sales in the Civil Code of Québec.  The said stated amount of the hypothec, lien and security interest is inserted to comply with the requirements of the Civil Code of Québec and represents the maximum amount for which the Collateral is hypothecated and granted.  It does not represent the amount of the indebtedness of Customer secured by the hypothecation, lien and security interest from time to time nor the amount of any credit available to Customer.

(h) Reports and Objections.  Daily confirmations of transactions in Contracts for the Account shall be submitted to Customer and absent manifest error shall be conclusive and binding on Customer unless Customer notifies Morgan Stanley of any objection thereto prior to the opening of trading on the contract market or trading facility on which such transaction occurred on the second Business Day following the day on which Customer receives such Statement; provided that, with respect to monthly statements, Customer may notify Morgan Stanley of any objection thereto within five Business Days after receipt of such monthly Statement.  Any such notice of objection, if given orally to Morgan Stanley, shall be promptly confirmed in writing by Customer.

(i)           Delivery Procedures; Options Allocation Procedure.

(i) Customer shall provide Morgan Stanley with instructions to liquidate Contracts previously established by Customer; to make or take delivery under any such Contracts; or to exercise options entered into by Customer, within such time limits as may be reasonably specified by Morgan Stanley.  Morgan Stanley shall have no responsibility to take any action on behalf of Customer or positions in the Account unless and until Morgan Stanley receives oral or written instructions reasonably acceptable to Morgan Stanley.  Funds sufficient to take delivery pursuant to any such Contract or deliverable grade commodities eligible under Applicable Law for the purpose of effecting delivery pursuant to such Contract must be delivered to Morgan Stanley at such time and in accordance with such procedures as Morgan Stanley may reasonably require in connection with any such delivery.

(ii) Short option Contracts may be subject to exercise at any time.  Exercise notices received by Morgan Stanley from the applicable contract market with respect to option Contracts sold by Customer may be allocated to Customer pursuant to a random allocation procedure, and Customer shall be bound by any such allocation of exercise notices.  In the event of any allocation to Customer, unless Morgan Stanley has received prior, timely instructions from Customer, Morgan Stanley’s sole responsibility shall be to use its best efforts to notify Customer of such allocation.

(iii) If Customer fails to comply with any of the foregoing obligations in this section 6(i), Morgan Stanley may liquidate any open positions, make or receive delivery of any commodities or instruments, or exercise or allow the expiration of any options, in such manner and on such terms as Morgan Stanley deems necessary or appropriate, and Customer shall indemnify and hold Morgan Stanley harmless as a result of any action taken or not taken by Morgan Stanley in connection therewith or pursuant to Customer’s instructions.

(j) Financial and Other Information.   Customer shall provide to Morgan Stanley such financial information regarding Customer as Morgan Stanley may from time to time reasonably request.  Customer shall notify Morgan Stanley promptly if the financial condition of Customer changes materially and adversely from that shown in the most recent financial information theretofore provided to Morgan Stanley.  An investigation may be conducted pertaining to Customer’s credit standing and business.  If Customer engages in exchange-for-physical, exchange-for-swap, exchange-for-risk, exchange-for-options or exchange-for-related-positions transactions, Customer agrees to provide Morgan Stanley, upon request, with documentation of the underlying cash, physical or swap transaction.

(k) Currency Exchange Risk.  Customer shall bear all risk and cost in respect of the conversion of currencies incident to transactions in Contracts effected on behalf of Customer.  Should Customer elect to deposit funds with Morgan Stanley other than the currency of settlement or instruct Morgan Stanley to convert funds which are already on deposit in another currency, Morgan Stanley shall debit or credit the Account of Customer at a rate of exchange determined by Morgan Stanley in its sole discretion on the basis of the then prevailing market rate of exchange for such foreign currency.  Customer authorizes Morgan Stanley to deposit Customer funds in depositories located outside of the United States, subject to and consistent with the requirements of Applicable Law.  Customer agrees that the conversion of currencies under this Agreement shall be for the sole purpose of effecting transactions in Contracts hereunder and under no circumstances for the purpose of effecting spot, forward or other over-the-counter foreign currency transactions.

(l) Inactive Accounts. Customer acknowledges that Morgan Stanley may deactivate accounts showing no trading activity and agrees to provide Morgan Stanley with any information and documents reasonably requested by Morgan Stanley in connection with Customer’s request to reactivate a closed account.

(m) Cross-Trade Consent.  Customer hereby acknowledges and agrees that Morgan Stanley and its affiliates, officers, employees, successors, assigns, or agents, including floor brokers acting on Morgan Stanley’s behalf, may in connection with any transaction in Contracts for the Account take the other side of such transaction, subject to the transaction being executed at the prevailing price and in accordance with Applicable Law.

(n) Authorization to Transfer Funds.  Customerhereby expressly agrees that Morgan Stanley may, in its sole and absolute discretion and without prior notice to Customer (provided that Morgan Stanley shall provide prior notice to Customer to the extent practicable), transfer any funds, securities, commodities or other property between and among Customer’s segregated, secured amount and sequestered or cleared swap accounts, consistent with and to the extent permitted under Applicable Law and for the sole purpose of executing, clearing and settling transactions in respect of Contracts.  Morgan Stanley shall promptly (and no later than within one Business Day) confirm in writing each transfer of funds, securities, commodities or other property pursuant hereto.  Other than as provided for under this authorization, Morgan Stanley shall not be permitted to transfer any funds, securities, commodities or other property to other accounts without the express written consent of Ceres.  For the avoidance of doubt, funds, securities or other property shall not be transferred among the accounts of different Customers.

(o) Give Up Transactions.  Absent a separate written agreement with Customer with respect to give-up transactions, Morgan Stanley, in its sole discretion, may, but shall not be obligated to, accept from other brokers Contracts executed by such brokers and to be given up to Morgan Stanley for clearance or carrying in any Account.

(p) Offset/Netting Rights.  Morgan Stanley and Customer agree that the parties shall have the right to offset any unrealized gains and losses on the Customer’s open positions and to net any open orders for the purchase or sale of any property of Customer.

7. Termination.  This Agreement may be terminated at any time by Customer upon written notice to Morgan Stanley, or Morgan Stanley upon 60 calendar days written notice to Customer.  In the event of such notice, Customer shall either close out open positions in the Account or arrange for such open positions to be transferred to another FCM.  Upon satisfaction by Customer of all of Customer’s liabilities, Morgan Stanley shall transfer to another FCM all Contracts, if any, then held for the Account, and shall transfer to Customer or to another FCM, as Customer may instruct, all cash, securities and other property held in the Account, whereupon this Agreement shall terminate.  Termination of this Agreement shall not release any party from any liability or obligation incurred or arising from activities prior to such termination.

8. Acknowledgements re Securities Transfer Act.For purposes of the Securities Transfer Act as implemented under the laws of an applicable Canadian province, the Personal Property Security Act of an applicable province, Article 9 of the New York Uniform Commercial Code and any similar legislation in any other applicable jurisdiction (a) the jurisdiction of Morgan Stanley as securities intermediary or commodity intermediary with respect to the Account and the Contracts is New York, (b) the Account is a “securities account,” a “futures account” and a “commodity account” and (c) any property of any nature whatsoever credited to the Account is a “financial asset” or “investment property”.

9. Eligible Financial Contract. This Agreement, including the security interest granted by this Agreement, and any Contract, are “eligible financial contracts” within the meaning of the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), the Winding-up and Restructuring Act (Canada)andthe  Payment Clearing and Settlement Act (Canada).  Customer represents that it is a “financial institution” for the purposes of the Payment Clearing and Settlement Act (Canada).

10. Miscellaneous.

(a) Severability.  If any provision of this Agreement is, or at any time becomes, inconsistent with any present or future requirement of Applicable Law, the inconsistent provision shall be deemed superseded or modified to conform with the relevant law, rule or regulation but in all other respects, this Agreement shall continue and remain in full force and effect.

(b) Binding Effect.  This Agreement shall be binding on and inure to the benefit of the parties and their successors.  In the event that Morgan Stanley (i) merges with another entity, or (ii) ceases to be a FCM or (iii) is required by Applicable Law to transfer its Customer accounts to another FCM, Morgan Stanley shall have the right to transfer or assign this Agreement (and thereby the Account) to any successor entity or to another properly registered FCM, to the extent consistent with and at all times subject to Applicable Law.

(c) Independent Adviser.  Customer hereby appoints Advisor as Customer’s agent for the purpose of receiving all communications, notices and requests for instructions related to this Agreement and the transactions effectuated pursuant to this Agreement, including, without limitation, margin calls and any trading information or advice (subject to Section 6(b) hereof).  Advisor is authorized to access and use electronic services, facilities and information provided electronically, including but not limited to Electronic Trading Services (as defined herein), and on behalf of Customer, to agree to the terms and conditions regarding such use and to enter into agreements relating to Electronic Trading Services.  Customer hereby agrees to indemnify and hold Morgan Stanley harmless from and to pay Morgan Stanley promptly on demand any and all Losses arising from Morgan Stanley’s reliance on any communication, notice or instruction of the Advisor until Morgan Stanley receives written notice of Customer’s revocation thereof; and termination of the appointment of the Advisor shall not affect any liability in any way resulting from transactions initiated prior to such termination.  This indemnity is in addition to (and in no way limits or restricts) any rights which Morgan Stanley may have under this Agreement and any other agreement or agreements between Morgan Stanley and Customer.  Nothing in this Section 10(c) shall relieve Customer of any of its obligations under this Agreement.

(d) Entire Agreement.  This Agreement contains the entire agreement between the parties and supersedes any prior oral and written agreements between the parties as to the subject matter hereof.  No provision of this Agreement shall in any respect be waived, altered, modified, or amended unless such waiver, alteration, modification or amendment is signed by the party against whom such waiver, alteration, modification or amendment is to be enforced.

(e) Currency Denomination.  Unless another currency is designated in the confirmations reporting transactions entered into by Customer, all margin deposits in connection with such transactions, and a debit or credit in the Account, shall be stated in United States dollars.  By placing an order in a Contract settled in a particular currency (the “Contract Currency”), Customer agrees to convert to the Contract Currency funds sufficient to meet the applicable margin requirement.  Customer understands and acknowledges that accruals from trades in Contracts that are priced and settled in non-United States dollars will be held in Customer’s account in such non-United States dollar Contract Currency and, except upon an Event of Default, will not be converted to United States dollars except upon Customer’s specific instructions to do so.  Any conversions of currency shall be at a rate of exchange determined by Morgan Stanley on the basis of the then prevailing rates of exchange for such currencies.

(f) Instructions, Notices or Communications.   Except as specifically otherwise provided in this Agreement, all instructions, notices or other communications may be oral or written (and for the avoidance of doubt, notification by facsimile or email to a fax number or email address provided by either party to the other for such purpose shall be deemed written notice).  Customer hereby waives any defense that such instruction, notice, or communication was not in writing.  All oral instructions, unless custom and usage of trade dictate otherwise, shall be promptly confirmed in writing.  All written instructions, notices or other communications shall be addressed as follows:

(i)           if to Morgan Stanley:

Morgan Stanley & Co. LLC

One New York Plaza, 7th Floor

New York, New York  10004

Attention:  Listed Derivatives Operations Manager

(ii) if to Customer, at the address (including email addresses) as indicated on the Commodity Futures Account Application.

In addition, the parties may agree from time to time to provide and receive written notice by electronic means for such purposes hereunder as they may agree and using email addresses that they mutually agree to use for such purposes.  Except as otherwise provided in this Agreement, notices shall be effective (1) if delivered by hand, on the date and at the time of delivery; (2) if sent by express mail service, on the date and at the time of delivery as evidenced by a confirmation from the relevant express mail services; and (3) if transmitted by facsimile or electronic means, on the date and at the time of transmission.

(g) Rights and Remedies Cumulative.  All rights and remedies arising under this Agreement as amended and modified from time to time are cumulative and not exclusive of any rights or remedies which may be available at law or otherwise.

(h) No Waiver.  Neither party’s failure to exercise, delay in exercising, or partial exercise of any contractual right under this or any other agreement, for Contracts or any other product, on any occasion or series of occasions is or implies waiver of any contractual right under any course of dealing theory or otherwise, and does not preclude any other future exercise, delayed exercise or partial exercise of any contractual right hereunder.

(i) Governing Law.  THE INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT AND THE RIGHTS, OBLIGATIONS AND REMEDIES OF THE PARTIES WITH RESPECT TO CONTROVERSIES ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CHOICE OF LAW (OTHER THAN SECTION 5-1401 OF NEW YORK GENERAL OBLIGATIONS LAW).

(j) Consent to Jurisdiction.   EACH OF THE PARTIES HEREBY CONSENTS TO THE JURISDICTION OF A STATE OR FEDERAL COURT SITUATED IN NEW YORK, NEW YORK IN CONNECTION WITH ANY DISPUTE ARISING HEREUNDER.  TO THE EXTENT THAT IN ANY JURISDICTION ANY PARTY MAY NOW OR HEREAFTER BE ENTITLED TO CLAIM, FOR ITSELF OR ITS ASSETS, IMMUNITY FROM SUIT, EXECUTION, ATTACHMENT (BEFORE OR AFTER JUDGMENT) OR OTHER LEGAL PROCESS, EACH PARTY HERETO IRREVOCABLY AGREES NOT TO CLAIM, AND IT HEREBY WAIVES, SUCH IMMUNITY.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION ON THE GROUND OF VENUE, FORUM NON CONVENIENS OR ANY SIMILAR GROUNDS.

(k) Waiver of Jury Trial.   CUSTOMER AND MORGAN STANLEY EACH HEREBY WAIVES A TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION IN CONNECTION THEREWITH.

(l) Equivalency Clause.  For purposes of disclosure pursuant to the Interest Act (Canada), the annual rate of interest which is equivalent to any rate of interest provided for in this Agreement which is to be calculated on any basis other than a full calendar year may be determined by multiplying such rate of interest (expressed as a percentage) by a fraction, the numerator of which is the number of days in the calendar year and the denominator of which is the number of days comprising such other basis.

(m) Language of Documentation. The parties hereto have required that this Agreement, and all documents and notices related thereto and/or resulting therefrom be drawn up in English.  Les parties aux présentes ont exigé que la présente convention ainsi que tous les documents et avis qui s’y rattachent et/ou en découlent soient redigés en langue anglaise.

(n) Business Day.  For purposes of this Agreement, “Business Day” shall mean any day on which, in respect of any transaction in Contracts for the Account, exchanges, trading facilities or clearing houses in the United States are open for such transactions.

(o)   Consent to Delivery of Electronic Statements.  The CFTC permits a customer to receive daily confirmations and monthly statements for the Account by electronic media, subject to obtaining customer consent.  Morgan Stanley maintains proprietary internet-based systems that deliver confirmations, statements and other reports to Customer in lieu of delivery by ordinary mail.  Customer should be aware of the following: (i) Customer’s consent, if given, will be effective upon execution of this Agreement and shall remain effective thereafter until revoked; (ii) Customer may revoke its consent at any time by written notice of revocation to Morgan Stanley which will be effective upon receipt by Morgan Stanley; and (iii) any electronic confirmation or statement is accessible on the internet-based system for a limited time following its initial posting.

Customer hereby consents to receiving confirmations and statements by electronic means in lieu of ordinary mail.  If Advisor is executing this Agreement on behalf of Customer as Customer’s agent and attorney-in-fact, Advisor hereby represents and warrants that it shall, at all times that this Consent to Delivery of Electronic Statements is in force, make access to the appropriate Morgan Stanley internet-based system available to Customer.

(p) If Customer is domiciled in the Province of Ontario, Canada, Customer hereby acknowledges that (1) Morgan Stanley may execute Contracts on behalf of Customer exclusively on futures exchanges located outside Canada, unless such Contracts are routed through an agent that is a dealer registered in Ontario under the Ontario Commodity Futures Act and the regulations thereunder (the “Ontario Act”); (2) there may be difficulty in enforcing any legal rights against Morgan Stanley, its directors, officers or employees because they are resident outside of Ontario and all or substantially all of Morgan Stanley’s assets are situated outside of Ontario; and (3) Morgan Stanley is not registered under the Ontario Act and, accordingly, the protection available to clients of a dealer registered under the Ontario Act may not be available to Customer.

(q) If Customer is domiciled in either the Province of British Columbia, Canada or the Province of Alberta, Canada, Customer hereby acknowledges that (1) there may be difficulty in enforcing any legal rights against Morgan Stanley or any of its directors, officers, employees or agents, because it is resident outside of British Columbia or Alberta (the “Passport Jurisdictions”) and all or substantially all of its assets are situated outside of the Passport Jurisdictions; (2) Morgan Stanley is not registered under the securities legislation of the Passport Jurisdictions and, accordingly, the protection available to clients of a dealer registered under such legislation will not be available to Customer; and (3) Morgan Stanley shall provide to Customer in a separate writing that is hereby incorporated by reference the name and address of an agent for service in the Passport Jurisdiction in which Customer is located.

(r) If Customer has indicated on the Commodity Futures Account Application that orders placed for the Account will normally represent bona fide hedging transactions, please complete the following.  You should note that CFTC Rule §190.06 permits you to specify whether, in the unlikely event of Morgan Stanley’s bankruptcy, you prefer the bankruptcy trustee to liquidate all positions in the Account.  Accordingly, Customer hereby elects as follows:  (please initial):

o             Liquidate                                      o           Do Not Liquidate

If neither alternative is initialed, Customer will be deemed to have elected to have all positions liquidated.  This election may be changed at any time by written notice.

(s) CUSTOMER HEREBY ACKNOWLEDGES THAT IT HAS RECEIVED AND UNDERSTANDS THE FOLLOWING DISCLOSURE STATEMENT PRESCRIBED BY THE CFTC AND FURNISHED HEREWITH.

Morgan Stanley hereby acknowledges that use of this form of agreement, by which Morgan Stanley agrees with multiple entities identified on Appendix A hereto, is for ease of administration only, and it is hereby acknowledged and agreed that by executing this Agreement Morgan Stanley shall have entered into and executed a separate agreement with each Customer separately, and containing terms and provisions identical to those contained in this Agreement, and without reference to any other entity identified on Appendix A or Appendix B, as applicable.  For clarity in any case where the Customer is a class, series, division or other legal or economic sub-element of any legal or juridical entity (e.g., by way of example, and not of limitation, one series of a series investment company), the obligations under these terms shall be those of such class, series, division or other supplement alone, and shall not be obligations of or binding on (or satisfied out of the assets of) the legal or juridical entity generally or any other class, series, division, or other sub-element of such entity.

IN WITNESS WHEREOF, Customer and Morgan Stanley have executed this Agreement on the date  indicated below.

Customer:                      Each fund set forth on Appendix A (which may be amended from time to time in accordance with the provisions of this Agreement) attached hereto, in their individual capacity

By:         /s/ Alper Daglioglu                                                                           11/12/13                      

(Date)

   Alper Daglioglu, Authorized Person                                                                                                             

(Please Print Name and Title)

MORGAN STANLEY & CO. LLC

By:         /s/ Ramesh Menon                                                                           11/12/13                      

(Date)

Ramesh Menon, Authorized Signatory                                                                                                           

(Please Print Name and Title)

Exhibit 10.01

APPENDIX A: CUSTOMER SCHEDULE TO AGREEMENT DATED AS OF

OCTOBER 29, 2013

Name

Morgan Stanley Smith Barney Spectrum Select L.P.

Morgan Stanley Smith Barney Spectrum Technical L.P.

Morgan Stanley Smith Barney Spectrum Global Balanced L.P.

Morgan Stanley Smith Barney Spectrum Currency and Commodity L.P. (formerly Morgan Stanley Smith Barney Spectrum Currency L.P.)

Morgan Stanley Smith Barney Charter Campbell L.P.

Morgan Stanley Smith Barney Charter Graham L.P.

Morgan Stanley Smith Barney Charter WNT L.P.

Morgan Stanley Smith Barney Charter Aspect L.P.

Morgan Stanley Smith Barney Altis I, LLC

Morgan Stanley Smith Barney Aspect I, LLC

Morgan Stanley Smith Barney Augustus I, LLC

Morgan Stanley Smith Barney BHM I, LLC

Morgan Stanley Smith Barney Campbell I, LLC

Morgan Stanley Smith Barney Chesapeake Diversified I, LLC

Morgan Stanley Smith Barney Boronia I, LLC

Morgan Stanley Smith Barney Kaiser I, LLC

Morgan Stanley Smith Barney AHL I, LLC

Morgan Stanley Smith Barney Rotella I, LLC

Morgan Stanley Smith Barney TT II, LLC

Morgan Stanley Smith Barney WNT I, LLC

Managed Futures Premier Altis L.P.

Managed Futures Premier Rotterdam L.P.

Managed Futures Premier Man-AHL L.P.

BHM Discretionary Futures Fund L.P.

Polaris Futures Fund L.P.

Name

LV Futures Fund L.P.

Meritage Futures Fund L.P.

Morgan Stanley Smith Barney Spectrum Strategic L.P.

Managed Futures Strategic Alternatives L.P.

Cambridge Master Fund L.P.

Waypoint Master Fund L.P.

Rabar Master Fund L.P.

CMF Drury Capital Master Fund, L.P.

CMF Graham Capital Master Fund L.P.

CMF Campbell Master Fund, L.P.

CMF Aspect Master Fund L.P.

CMF Winton Master L.P.

Morgan Stanley Managed Futures Custom Solution Fund LP

Potomac Futures Fund LP

Westport Futures Fund LP

Managed Futures Premier Warrington LP

Fairfield Futures Fund L.P. II

Fairfield Futures Fund L.P.

CMF Willowbridge Master Fund L.P.

PGR Master Fund L.P.

KR Master Fund L.P.

CMF Altis Partners Master Fund L.P.

MB Master Fund L.P.

SECOR Master Fund L.P.

Diversified 2000 Futures Fund L.P.

Diversified Multi-Advisor Futures Fund L.P.

Diversified Multi-Advisor Futures Fund L.P. II

Name

Tactical Diversified Futures Fund L.P.

Tidewater Futures Fund L.P.

Institutional Futures Portfolio L.P.

Global Diversified Futures Fund L.P.

CMF Winton Feeder I L.P.

Managed Futures Premier Abingdon L.P.

Emerging CTA Portfolio L.P.

Commodity Advisors Fund L.P.

Managed Futures Premier Aventis II L.P.

AAA Master Fund LLC

Principle Master Fund L.P.

300 North Capital Master Fund L.P.

Blackwater Master Fund L.P.

CMF Eckhardt Master Fund L.P.

JEM Master Fund L.P.

EX-31.01

EXHIBIT 31.01

CERTIFICATIONS

I, Alper Daglioglu, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Morgan Stanley Smith Barney Charter Aspect L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 13, 2013	By:	/s/Alper Daglioglu
		Alper Daglioglu
		President and Director,
		Ceres Managed Futures LLC,
		General Partner of the registrant

EX-31.02

EXHIBIT 31.02

CERTIFICATIONS

I, Alice Lonero, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Morgan Stanley Smith Barney Charter Aspect L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition , results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this  report is being prepared;

b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  November 13, 2013	By:	/s/ Alice Lonero
		Alice Lonero
		Chief Financial Officer,
		Ceres Managed Futures LLC,
		General Partner of the registrant

EX-32.01

EXHIBIT 32.01

CERTIFICATION OF PRESIDENT PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Morgan Stanley Smith Barney Charter Aspect L.P. (the “Partnership”) on Form    10-Q for the quarter ended September 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Alper Daglioglu, President and Director of Ceres Managed Futures LLC, the General Partner of the Partnership, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

By:	/s/Alper Daglioglu
Name:	Alper Daglioglu
Title:	President and Director of
	Ceres Managed Futures LLC,
	General Partner of the registrant
Date:	November 13, 2013

EX-32.02

EXHIBIT 32.02

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Morgan Stanley Smith Barney Charter Aspect L.P. (the “Partnership”) on Form   10-Q for the quarter ended September 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Alice Lonero, Chief Financial Officer of Ceres Managed Futures LLC, the General Partner of the Partnership, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

By:	/s/Alice Lonero
Name:	Alice Lonero
Title:	Chief Financial Officer of
	Ceres Managed Futures LLC
	General Partner of the registrant
Date:	November 13, 2013

XML

Financial Highlights (Tables)

9 Months Ended

Sep. 30, 2013

Financial Highlights, Disclosures [Line Items]

Financial Highlights

Financial Highlights for the three and nine months ended September 30, 2013 and 2012 were as follows:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2013			2012			2013			2012
Per Unit operating performance:
Net asset value at the beginning of the period:	$	17.25		$	19.90		$	17.83		$	20.94
Interest Income		–	(3)		–	(3)		0.01			0.01
Expenses		(0.32	)		(0.38	)		(1.00	)		(1.23	)
Realized/Unrealized Loss (1)		(1.12	)		(0.53	)		(1.03	)		(0.73	)
Net Loss		(1.44	)		(0.91	)		(2.02	)		(1.95	)
Net asset value, September 30:	$	15.81		$	18.99		$	15.81		$	18.99
Ratios to average net assets:
Net Investment Loss  (2)		(7.8	)%		(7.6	)%		(7.7	)%		(8.0	)%
Expenses before Incentive Fees (2)		7.8	%		7.7	%		7.8	%		8.0	%
Expenses after Incentive Fees (2)		7.8	%		7.7	%		7.8	%		8.0	%
Net Loss  (2)		(35.3	)%		(18.1	)%		(14.9	)%		(12.1	)%
Total return before incentive fees		(8.3	)%		(4.6	)%		(11.3	)%		(9.3	)%
Total return after incentive fees		(8.3	)%		(4.6	)%		(11.3	)%		(9.3	)%

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

⁽²⁾ Annualized (except for incentive fees if applicable).

⁽³⁾ Amounts less than $0.005 per Unit.

XML

Condensed Schedule of Investments (Unaudited) (USD $)	Sep. 30, 2013		Dec. 31, 2012
Investment Holdings [Line Items]
Net unrealized gain/(loss) on open contracts	$ (22,838)		$ 1,617,474
Percentage of Partners' Capital (in hundredths)	(0.05%)		2.56%
Unrealized currency gain	834,958		802,973
Unrealized currency gain percentage of Partners' Capital (in hundredths)	1.77%		1.27%
Contracts Purchased [Member] | Futures And Forward Contracts [Member]
Investment Holdings [Line Items]
Net unrealized gain/(loss) on open contracts	116,619		436,389
Percentage of Partners' Capital (in hundredths)	0.25%		0.69%
Contracts Purchased [Member] | Futures And Forward Contracts [Member] | Commodity Contract [Member]
Investment Holdings [Line Items]
Net unrealized gain/(loss) on open contracts	(278,433)		(162,622)
Percentage of Partners' Capital (in hundredths)	(0.59%)		(0.26%)
Contracts Purchased [Member] | Futures And Forward Contracts [Member] | Equity Contract [Member]
Investment Holdings [Line Items]
Net unrealized gain/(loss) on open contracts	(141,580)		696,764
Percentage of Partners' Capital (in hundredths)	(0.30%)		1.10%
Contracts Purchased [Member] | Futures And Forward Contracts [Member] | Foreign Currency [Member]
Investment Holdings [Line Items]
Net unrealized gain/(loss) on open contracts	308,956		(141,431)
Percentage of Partners' Capital (in hundredths)	0.66%		(0.22%)
Contracts Purchased [Member] | Futures And Forward Contracts [Member] | Interest Rate Contract [Member]
Investment Holdings [Line Items]
Net unrealized gain/(loss) on open contracts	227,676		43,678
Percentage of Partners' Capital (in hundredths)	0.48%		0.07%
Contracts Sold [Member] | Futures And Forward Contracts [Member]
Investment Holdings [Line Items]
Net unrealized gain/(loss) on open contracts	(974,415)		378,112
Percentage of Partners' Capital (in hundredths)	(2.07%)		0.60%
Contracts Sold [Member] | Futures And Forward Contracts [Member] | Commodity Contract [Member]
Investment Holdings [Line Items]
Net unrealized gain/(loss) on open contracts	127,199		131,102
Percentage of Partners' Capital (in hundredths)	0.27%		0.21%
Contracts Sold [Member] | Futures And Forward Contracts [Member] | Equity Contract [Member]
Investment Holdings [Line Items]
Net unrealized gain/(loss) on open contracts	1,530		(7,075)
Percentage of Partners' Capital (in hundredths)	0.00%	[1]	(0.01%)
Contracts Sold [Member] | Futures And Forward Contracts [Member] | Foreign Currency [Member]
Investment Holdings [Line Items]
Net unrealized gain/(loss) on open contracts	(199,538)		261,013
Percentage of Partners' Capital (in hundredths)	(0.42%)		0.41%
Contracts Sold [Member] | Futures And Forward Contracts [Member] | Interest Rate Contract [Member]
Investment Holdings [Line Items]
Net unrealized gain/(loss) on open contracts	$ (903,606)		$ (6,928)
Percentage of Partners' Capital (in hundredths)	(1.92%)		(0.01%)

[1] Amounts less than 0.005%.

XML

Financial Instruments

9 Months Ended

Sep. 30, 2013

Financial Instruments [Abstract]

Financial Instruments

4. Financial Instruments

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

The fair value of exchange-traded contracts is based on the settlement price quoted by the exchange on the day with respect to which fair value is being determined.  If an exchange-traded contract could not have been liquidated on such day due to the operation of daily limits or other rules of the exchange, the settlement price will be equal to the settlement price on the first subsequent day on which the contract could be liquidated.  The fair value of off-exchange-traded contracts is based on the fair value quoted by the counterparty.

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

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

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

3) Terms that require or permit net settlement.

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

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

	Net Unrealized Gains (Losses) on Open Contracts								Longest Maturities
Date	Exchange-Traded			Off-Exchange-Traded		Total			Exchange-Traded	Off-Exchange-Traded
	$			$		$
Sep. 30, 2013		(134,218	)		111,380		(22,838	)	Mar. 2016	Dec. 2013
Dec. 31, 2012		1,517,757			99,717		1,617,474		Jun. 2015	Jan. 2013

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

The Partnership also has credit risk because MS&Co. acts as the futures commission merchant or the counterparty, with respect to most of the Partnership’s assets. Exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts are fair valued on a daily basis, with variations in value settled on a daily basis. MS&Co., which is acting as a commodity futures broker for the Partnership’s exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts, is required, pursuant to regulations of the Commodity Futures Trading Commission (“CFTC”), to segregate from its own assets, and for the sole benefit of its commodity customers, total cash held by it with respect to exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts, including an amount equal to the net unrealized gains (losses) on all open exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts, which, in the aggregate, totaled $47,931,368 and $64,938,716 at September 30, 2013 and December 31, 2012, respectively.  With respect to the Partnership’s off-exchange-traded forward currency contracts, there are no daily settlements of variation in value, nor is there any requirement that an amount equal to the net unrealized gains (losses) on such contracts be segregated.  However, the Partnership is required to meet margin requirements equal to the net unrealized loss on open forward currency contracts in the Partnership accounts with the counterparty, which is accomplished by daily maintenance of the cash balance in a custody account held at MS&Co. for the benefit of MS&Co. With respect to those off-exchange-traded forward currency contracts, the Partnership is at risk to the ability of MS&Co., the sole counterparty on all such contracts, to perform. The Partnership has a master netting agreement with MS&Co.  The primary terms are based on industry standard master agreements.  This agreement, which seeks to reduce both the Partnership’s and MS&Co.’s exposure on off-exchange-traded forward currency contracts, should materially decrease the Partnership’s credit risk in the event of MS&Co.’s bankruptcy or insolvency.

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

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

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Derivatives and Hedging (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Offsetting of Derivative Assets [Line Items]
Gross amounts recognized	$ 760,323	$ 1,504,919
Gross amounts offset in the statements of financial condition	(643,704)	(1,068,530)
Net amounts presented in the statement of financial condition	116,619	436,389
Offsetting of Derivative Liabilities [Line Items]
Gross amounts recognized	444,176	947,065
Gross amounts offset in the statement of financial condition	(1,418,591)	(568,953)
Net amounts presented in the statement of financial condition	(974,415)	378,112
Unrealized currency gain	834,958	802,973
Net unrealized gain/(loss) on open contracts	(22,838)	1,617,474
Futures [Member]
Offsetting of Derivative Assets [Line Items]
Gross amounts recognized	424,181	1,295,413
Gross amounts offset in the statements of financial condition	(611,981)	(720,472)
Net amounts presented in the statement of financial condition	(187,800)	574,941
Offsetting of Derivative Liabilities [Line Items]
Gross amounts recognized	434,811	521,699
Gross amounts offset in the statement of financial condition	(1,216,187)	(381,857)
Net amounts presented in the statement of financial condition	(781,376)	139,842
Forward Contracts [Member]
Offsetting of Derivative Assets [Line Items]
Gross amounts recognized	336,142	209,506
Gross amounts offset in the statements of financial condition	(31,723)	(348,058)
Net amounts presented in the statement of financial condition	304,419	(138,552)
Offsetting of Derivative Liabilities [Line Items]
Gross amounts recognized	9,365	425,366
Gross amounts offset in the statement of financial condition	(202,404)	(187,096)
Net amounts presented in the statement of financial condition	$ (193,039)	$ 238,270

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Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2013

Net Unrealized Gains And Losses on Open Contracts, Disclosures [Line Items]

Net Unrealized Gain (Loss) on Open Contracts

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

	Net Unrealized Gains (Losses) on Open Contracts								Longest Maturities
Date	Exchange-Traded			Off-Exchange-Traded		Total			Exchange-Traded	Off-Exchange-Traded
	$			$		$
Sep. 30, 2013		(134,218	)		111,380		(22,838	)	Mar. 2016	Dec. 2013
Dec. 31, 2012		1,517,757			99,717		1,617,474		Jun. 2015	Jan. 2013

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Fair Value Measurements and Disclosures (Details) (USD $)	Sep. 30, 2013		Dec. 31, 2012
Assets and Liabilities Measured at Fair Value [Abstract]
Unrealized currency gain	$ 834,958		$ 802,973
Net fair value	(22,838)		1,617,474
Fair Value Measured on a Recurring Basis [Member]
Assets [Abstract]
Futures	858,992		1,817,113
Forwards	345,507		634,871
Total Assets	1,204,499		2,451,984
Liabilities [Abstract]
Futures	1,828,168		1,102,329
Forwards	234,127		535,154
Total Liabilities	2,062,295		1,637,483
Assets and Liabilities Measured at Fair Value [Abstract]
Unrealized currency gain	834,958		802,973
Net fair value	(22,838)	[1]	1,617,474	[1]
Fair Value Measured on a Recurring Basis [Member] | Unadjusted Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets [Abstract]
Futures	858,992		1,817,113
Forwards	0		0
Total Assets	858,992		1,817,113
Liabilities [Abstract]
Futures	1,828,168		1,102,329
Forwards	0		0
Total Liabilities	1,828,168		1,102,329
Assets and Liabilities Measured at Fair Value [Abstract]
Net fair value	(969,176)	[1]	714,784	[1]
Fair Value Measured on a Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member]
Assets [Abstract]
Futures	0		0
Forwards	345,507		634,871
Total Assets	345,507		634,871
Liabilities [Abstract]
Futures	0		0
Forwards	234,127		535,154
Total Liabilities	234,127		535,154
Assets and Liabilities Measured at Fair Value [Abstract]
Net fair value	111,380	[1]	99,717	[1]
Fair Value Measured on a Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member]
Assets [Abstract]
Futures
Forwards
Total Assets
Liabilities [Abstract]
Futures
Forwards
Total Liabilities
Assets and Liabilities Measured at Fair Value [Abstract]
Net fair value		[1]		[1]

[1] This amount comprises the “Net unrealized gain (loss) on open contracts” on the Statements of Financial Condition.

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Derivatives and Hedging, Effect of Trading Activities on Statements of Financial Condition (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Futures and Forward Contracts [Abstract]
Net unrealized gain/(loss) on open contracts	$ (22,838)		$ (22,838)		$ 1,617,474
Unrealized currency gain (loss)	834,958		834,958		802,973
Effect of Trading Activities on Statements of Income [Abstract]
Unrealized currency gain (loss)	1,036	(25,407)	31,986	(42,986)
Net realized	(413,837)	(3,632,579)	(1,326,172)	(88,313)
Net change in unrealized	(3,022,936)	1,622,925	(1,640,312)	(2,522,906)
Total Trading Results	(3,436,773)	(2,009,654)	(2,966,484)	(2,611,219)
Commodity [Member]
Effect of Trading Activities on Statements of Income [Abstract]
Trading results	(2,537,638)	(2,690,378)	(258,887)	(1,850,378)
Equity [Member]
Effect of Trading Activities on Statements of Income [Abstract]
Trading results	367,650	(745,518)	3,054,049	(2,835,325)
Foreign Currency [Member]
Effect of Trading Activities on Statements of Income [Abstract]
Trading results	(409,100)	672,460	(1,759,590)	(1,811,920)
Interest Rate [Member]
Effect of Trading Activities on Statements of Income [Abstract]
Trading results	(858,721)	779,189	(4,034,042)	3,929,390
Futures and Forward Contracts [Member]
Futures and Forward Contracts [Abstract]
Net unrealized gain/(loss) on open contracts	(857,796)		(857,796)		814,501
Futures and Forward Contracts [Member] | Commodity [Member]
Futures and Forward Contracts [Abstract]
Net unrealized gain/(loss) on open contracts	(151,234)		(151,234)		(31,520)
Average number of contracts outstanding	936		936		858
Futures and Forward Contracts [Member] | Equity [Member]
Futures and Forward Contracts [Abstract]
Net unrealized gain/(loss) on open contracts	(140,050)		(140,050)		689,689
Average number of contracts outstanding	561		561		592
Futures and Forward Contracts [Member] | Foreign Currency [Member]
Futures and Forward Contracts [Abstract]
Net unrealized gain/(loss) on open contracts	109,418		109,418		119,582
Average number of contracts outstanding	803		803		936
Futures and Forward Contracts [Member] | Interest Rate [Member]
Futures and Forward Contracts [Abstract]
Net unrealized gain/(loss) on open contracts	(675,930)		(675,930)		36,750
Average number of contracts outstanding	1,522		1,522		2,731
Futures and Forward Contracts [Member] | Long [Member]
Futures and Forward Contracts [Abstract]
Unrealized gain	760,323		760,323		1,504,919
Unrealized loss	(643,704)		(643,704)		(1,068,530)
Futures and Forward Contracts [Member] | Long [Member] | Commodity [Member]
Futures and Forward Contracts [Abstract]
Unrealized gain	51,438		51,438		146,738
Unrealized loss	(329,871)		(329,871)		(309,360)
Futures and Forward Contracts [Member] | Long [Member] | Equity [Member]
Futures and Forward Contracts [Abstract]
Unrealized gain	120,614		120,614		731,889
Unrealized loss	(262,194)		(262,194)		(35,125)
Futures and Forward Contracts [Member] | Long [Member] | Foreign Currency [Member]
Futures and Forward Contracts [Abstract]
Unrealized gain	340,679		340,679		215,614
Unrealized loss	(31,723)		(31,723)		(357,045)
Futures and Forward Contracts [Member] | Long [Member] | Interest Rate [Member]
Futures and Forward Contracts [Abstract]
Unrealized gain	247,592		247,592		410,678
Unrealized loss	(19,916)		(19,916)		(367,000)
Futures and Forward Contracts [Member] | Short [Member]
Futures and Forward Contracts [Abstract]
Unrealized gain	444,176		444,176		947,065
Unrealized loss	(1,418,591)		(1,418,591)		(568,953)
Futures and Forward Contracts [Member] | Short [Member] | Commodity [Member]
Futures and Forward Contracts [Abstract]
Unrealized gain	433,281		433,281		497,636
Unrealized loss	(306,082)		(306,082)		(366,534)
Futures and Forward Contracts [Member] | Short [Member] | Equity [Member]
Futures and Forward Contracts [Abstract]
Unrealized gain	1,530		1,530		0
Unrealized loss	0		0		(7,075)
Futures and Forward Contracts [Member] | Short [Member] | Foreign Currency [Member]
Futures and Forward Contracts [Abstract]
Unrealized gain	9,365		9,365		448,109
Unrealized loss	(208,903)		(208,903)		(187,096)
Futures and Forward Contracts [Member] | Short [Member] | Interest Rate [Member]
Futures and Forward Contracts [Abstract]
Unrealized gain	0		0		1,320
Unrealized loss	$ (903,606)		$ (903,606)		$ (8,248)

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Statements of Changes in Partners' Capital (Unaudited) (USD $)	Limited Partners [Member]	General Partner [Member]	Total
Partners' Capital at Dec. 31, 2011	$ 92,674,799	$ 1,070,769	$ 93,745,568
Partners' Capital (in units) at Dec. 31, 2011			4,476,439.147
Increase/(decrease) in Partners' Capital [Roll Forward]
Net Loss	(7,562,060)	(85,298)	(7,647,358)
Redemptions	(13,616,521)	(200,012)	(13,816,533)
Redemptions (in units)			(670,366.026)
Partners' Capital at Sep. 30, 2012	71,496,218	785,459	72,281,677
Partner's Capital (in units) at Sep. 30, 2012			3,806,073.121
Partners' Capital at Dec. 31, 2012	62,561,958	737,538	63,299,496
Partners' Capital (in units) at Dec. 31, 2012			3,549,673.924
Increase/(decrease) in Partners' Capital [Roll Forward]
Net Loss	(6,107,387)	(68,859)	(6,176,246)
Redemptions	(9,912,832)	(100,008)	(10,012,840)
Redemptions (in units)			(570,701.998)
Partners' Capital at Sep. 30, 2013	$ 46,541,739	$ 568,671	$ 47,110,410
Partner's Capital (in units) at Sep. 30, 2013			2,978,971.926

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Financial Highlights

9 Months Ended

Sep. 30, 2013

Financial Highlights [Abstract]

Financial Highlights

2. Financial Highlights

Financial Highlights for the three and nine months ended September 30, 2013 and 2012 were as follows:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2013			2012			2013			2012
Per Unit operating performance:
Net asset value at the beginning of the period:	$	17.25		$	19.90		$	17.83		$	20.94
Interest Income		–	(3)		–	(3)		0.01			0.01
Expenses		(0.32	)		(0.38	)		(1.00	)		(1.23	)
Realized/Unrealized Loss (1)		(1.12	)		(0.53	)		(1.03	)		(0.73	)
Net Loss		(1.44	)		(0.91	)		(2.02	)		(1.95	)
Net asset value, September 30:	$	15.81		$	18.99		$	15.81		$	18.99
Ratios to average net assets:
Net Investment Loss  (2)		(7.8	)%		(7.6	)%		(7.7	)%		(8.0	)%
Expenses before Incentive Fees (2)		7.8	%		7.7	%		7.8	%		8.0	%
Expenses after Incentive Fees (2)		7.8	%		7.7	%		7.8	%		8.0	%
Net Loss  (2)		(35.3	)%		(18.1	)%		(14.9	)%		(12.1	)%
Total return before incentive fees		(8.3	)%		(4.6	)%		(11.3	)%		(9.3	)%
Total return after incentive fees		(8.3	)%		(4.6	)%		(11.3	)%		(9.3	)%

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

⁽²⁾ Annualized (except for incentive fees if applicable).

⁽³⁾ Amounts less than $0.005 per Unit.

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Derivatives and Hedging

9 Months Ended

Sep. 30, 2013

Derivatives and Hedging [Abstract]

Derivatives and Hedging

5. Derivatives and Hedging

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

On January 1, 2013, the Partnership adopted Accounting Standards Update (“ASU”) 2011-11, “Disclosure about Offsetting Assets and Liabilities” and ASU 2013-01, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”.  ASU 2011-11 created a new disclosure requirement about the nature of an entity’s rights to setoff and the related arrangements associated with its financial instruments and derivative instruments, while ASU 2013-01 clarified 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 accounting principles generally accepted in the United States of America (“U.S. GAAP”) and those entities that prepare their financial statements on the basis of International Financial Reporting Standards. The new guidance did not have a significant impact on the Partnership’s financial statements.

The following tables summarize the valuation of the Partnership’s investments as of September 30, 2013 and December 31, 2012, respectively.

Offsetting of Derivative Assets and Liabilities as of September 30, 2013:

	Gross Amounts Recognized		Gross Amounts Offset in the Statement of Financial Condition			Net Amounts Presented in the Statement of Financial Condition
		$		$			$
Assets
Futures		424,181		(611,981	)		(187,800	)
Forwards		336,142		(31,723	)		304,419
Total Assets		760,323		(643,704	)		116,619
Liabilities
Futures		434,811		(1,216,187	)		(781,376	)
Forwards		9,365		(202,404	)		(193,039	)
Total Liabilities		444,176		(1,418,591	)		(974,415	)
Unrealized currency gain							834,958
Total net unrealized loss on open contracts							(22,838	)

Offsetting of Derivative Assets and Liabilities as of December 31, 2012:

	Gross Amounts Recognized		Gross Amounts Offset in the Statement of Financial Condition			Net Amounts Presented in the Statement of Financial Condition
		$		$			$
Assets
Futures		1,295,413		(720,472	)		574,941
Forwards		209,506		(348,058	)		(138,552	)
Total Assets		1,504,919		(1,068,530	)		436,389
Liabilities
Futures		521,699		(381,857	)		139,842
Forwards		425,366		(187,096	)		238,270
Total Liabilities		947,065		(568,953	)		378,112
Unrealized currency gain							802,973
Net unrealized gain on open contracts							1,617,474

The Effect of Trading Activities on the Statements of Financial Condition as of September 30, 2013:

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 nine months (absolute quantity)
	$		$			$		$			$
Commodity		51,438		(329,871	)		433,281		(306,082	)		(151,234	)		936
Equity		120,614		(262,194	)		1,530		–			(140,050	)		561
Foreign currency		340,679		(31,723	)		9,365		(208,903	)		109,418			803
Interest rate		247,592		(19,916	)		–		(903,606	)		(675,930	)		1,522
Total		760,323		(643,704	)		444,176		(1,418,591	)		(857,796	)
Unrealized currency gain												834,958
Total net unrealized loss on open contracts												(22,838	)

The Effect of Trading Activities on the Statements of Financial Condition as of December 31, 2012:

Futures and Forward Contracts	Long Unrealized Gain		Long Unrealized Loss			Short Unrealized Gain		Short Unrealized Loss			Net Unrealized Gain/(Loss)			Average number of contracts outstanding for the year (absolute quantity)
	$		$			$		$			$
Commodity		146,738		(309,360	)		497,636		(366,534	)		(31,520	)		858
Equity		731,889		(35,125	)		–		(7,075	)		689,689			592
Foreign currency		215,614		(357,045	)		448,109		(187,096	)		119,582			936
Interest rate		410,678		(367,000	)		1,320		(8,248	)		36,750			2,731
Total		1,504,919		(1,068,530	)		947,065		(568,953	)		814,501
Unrealized currency gain												802,973
Net unrealized gain on open contracts												1,617,474

The following tables summarize the net trading results of the Partnership for the three and nine months  ended September 30, 2013 and 2012, respectively.

The Effect of Trading Activities on the Statements of Income and Expenses for the Three and Nine Months Ended September 30, 2013 included in Total Trading Results:

	For the Three Months			For the Nine Months
	Ended September 30, 2013			Ended September 30, 2013
Type of Instrument	$			$
Commodity		(2,537,638	)		(258,887	)
Equity		367,650			3,054,049
Foreign currency		(409,100	)		(1,759,590	)
Interest rate		(858,721	)		(4,034,042	)
Unrealized currency gain		1,036			31,986
Total		(3,436,773	)		(2,966,484	)

Line Items on the Statements of Income and Expenses for the Three and Nine Months Ended September 30, 2013:

	For the Three Months			For the Nine Months
	Ended September 30, 2013			Ended September 30, 2013
Trading Results	$			$
Net realized		(413,837	)		(1,326,172	)
Net change in unrealized		(3,022,936	)		(1,640,312	)
Total Trading Results		(3,436,773	)		(2,966,484	)

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

	For the Three Months			For the Nine Months
	Ended September 30, 2012			Ended September 30, 2012
Type of Instrument	$			$
Commodity		(2,690,378	)		(1,850,378	)
Equity		(745,518	)		(2,835,325	)
Foreign currency		672,460			(1,811,920	)
Interest rate		779,189			3,929,390
Unrealized currency loss		(25,407	)		(42,986	)
Total		(2,009,654	)		(2,611,219	)

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

	For the Three Months			For the Nine Months
	Ended September 30, 2012			Ended September 30, 2012
Trading Results	$			$
Net realized		(3,632,579	)		(88,313	)
Net change in unrealized		1,622,925			(2,522,906	)
Total Trading Results		(2,009,654	)		(2,611,219	)

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Related Party Transactions

9 Months Ended

Sep. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions

3. Related Party Transactions

The Partnership’s cash is on deposit in commodity brokerage accounts with Morgan Stanley.  Monthly, MS&Co. pays the Partnership interest income on 100% of the average daily equity maintained in cash in the Partnership’s account during each month at a rate equal to 80% of the monthly average of the 4-week U.S. Treasury bill discount rate.  MS&Co. retains any interest earned in excess of the interest paid by MS&Co. to the Partnership.  For purposes of such interest payments, net assets do not include monies due to the Partnership on Futures Interests that have not been received.  The Partnership pays a flat rate brokerage fee to MS&Co.

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Statements of Financial Condition (Unaudited) (Parenthetical)	Sep. 30, 2013	Dec. 31, 2012
Partners' Capital [Abstract]
Limited Partners, Units (in units)	2,943,012.703	3,508,314.701
General Partner, Units (in units)	35,959.223	41,359.223

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Restricted and Unrestricted Cash

9 Months Ended

Sep. 30, 2013

Restricted and Unrestricted Cash [Abstract]

Restricted and Unrestricted Cash

8. Restricted and Unrestricted Cash

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

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Statements of Income and Expenses (Unaudited) (USD $)	3 Months Ended				9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012		Sep. 30, 2013		Sep. 30, 2012
INVESTMENT INCOME
Interest income (MS&Co. & Morgan Stanley Wealth Management)	$ 2,788		$ 13,999		$ 17,341		$ 32,789
EXPENSES
Brokerage fees (MS&Co.)	778,565		1,182,843		2,581,682		3,902,473
Management fees	194,641		295,711		645,421		1,166,455
Total Expenses	973,206		1,478,554		3,227,103		5,068,928
NET INVESTMENT LOSS	(970,418)		(1,464,555)		(3,209,762)		(5,036,139)
Trading profit (loss):
Net realized	(413,837)		(3,632,579)		(1,326,172)		(88,313)
Net change in unrealized	(3,022,936)		1,622,925		(1,640,312)		(2,522,906)
Total Trading Results	(3,436,773)		(2,009,654)		(2,966,484)		(2,611,219)
NET LOSS	(4,407,191)		(3,474,209)		(6,176,246)		(7,647,358)
NET LOSS ALLOCATION
Limited Partners	(4,355,744)		(3,442,250)		(6,107,387)		(7,562,060)
General Partner	$ (51,447)		$ (31,959)		$ (68,859)		$ (85,298)
NET LOSS PER UNIT
Limited Partners (in dollars per unit)	$ (1.44)	[1]	$ (0.91)	[1]	$ (2.02)	[1]	$ (1.95)	[1]
General Partner (in dollars per unit)	$ (1.44)	[1]	$ (0.91)	[1]	$ (2.02)	[1]	$ (1.95)	[1]
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING (in units)	3,086,619.119		3,934,900.850		3,259,117.616		4,172,568.130

[1] Based on change in net asset value per Unit.

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Statements of Financial Condition (Unaudited) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Trading Equity:
Unrestricted cash	$ 42,896,155	$ 57,406,016
Restricted cash	5,169,431	6,014,943
Total cash	48,065,586	63,420,959
Net unrealized gain (loss) on open contracts (MS&Co.)	(22,838)	1,617,474
Total Trading Equity	48,042,748	65,038,433
Interest receivable (MS&Co)	371	1,952
Total Assets	48,043,119	65,040,385
Liabilities:
Redemptions payable	624,683	1,338,507
Accrued brokerage fees (MS&Co.)	246,421	321,906
Accrued management fees	61,605	80,476
Total Liabilities	932,709	1,740,889
Partners' Capital:
Limited Partners (2,943,012.703 and 3,508,314.701 Units, respectively)	46,541,739	62,561,958
General Partner (35,959.223 and 41,359.223 Units, respectively)	568,671	737,538
Total Partners' Capital	47,110,410	63,299,496
Total Liabilities and Partners' Capital	$ 48,043,119	$ 65,040,385
NET ASSET VALUE PER UNIT (in dollars per unit)	$ 15.81	$ 17.83

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Financial Instruments (Details) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Investment Holdings [Line Items]
Net unrealized gains (losses) on open contracts	$ (22,838)	$ 1,617,474
Cash held by acting commodity futures brokers administrating open contracts	47,931,368	64,938,716
Exchange-Traded [Member]
Investment Holdings [Line Items]
Net unrealized gains (losses) on open contracts	(134,218)	1,517,757
Longest maturity date	Mar. 31, 2016	Jun. 30, 2015
Off-Exchange-Traded [Member]
Investment Holdings [Line Items]
Net unrealized gains (losses) on open contracts	$ 111,380	$ 99,717
Longest maturity date	Dec. 31, 2013	Jan. 31, 2013

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Other Pronouncements

9 Months Ended

Sep. 30, 2013

Other Pronouncements [Abstract]

Other Pronouncements

7. Other Pronouncements

In June 2013, the FASB issued ASU 2013-08, “Financial Services – Investments Companies (Topic 946): Amendments to the Scope, Measurement and Disclosure Requirements”.  ASU 2013-08 changes the approach to the investment company assessment, requires non-controlling ownership interests in other investment companies to be measured at fair value, and requires additional disclosures about the investment company’s status as an investment company.  The amendments are effective for interim and annual reporting periods beginning after December 15, 2013.  The Partnership is currently evaluating the impact this pronouncement would have on the financial statements.

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Subsequent Events

9 Months Ended

Sep. 30, 2013

Subsequent Events [Abstract]

Subsequent Events

10. Subsequent Events

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

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Fair Value Measurements and Disclosures

9 Months Ended

Sep. 30, 2013

Fair Value Measurements and Disclosures [Abstract]

Fair Value Measurements and Disclosures

6. Fair Value Measurements and Disclosures

On October 1, 2012, the FASB issued ASU 2012-04, “Technical Corrections and Improvements”, which makes minor technical corrections and clarifications to ASC 820, “Fair Value Measurements and Disclosures”. When the FASB issued Statement 157 (codified in ASC 820), it conformed the use of 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 after December 15, 2012. The adoption of this ASU did not have a significant impact on the Partnership’s financial statements.

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

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

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

September 30, 2013	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		858,992			–		n/a		858,992
Forwards		–			345,507		n/a		345,507
Total Assets		858,992			345,507		n/a		1,204,499
Liabilities
Futures		1,828,168			–		n/a		1,828,168
Forwards		–			234,127		n/a		234,127
Total Liabilities		1,828,168			234,127		n/a		2,062,295
Unrealized currency gain									834,958
*Net fair value		(969,176	)		111,380		n/a		(22,838	)

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		1,817,113		–		n/a		1,817,113
Forwards		–		634,871		n/a		634,871
Total Assets		1,817,113		634,871		n/a		2,451,984
Liabilities
Futures		1,102,329		–		n/a		1,102,329
Forwards		–		535,154		n/a		535,154
Total Liabilities		1,102,329		535,154		n/a		1,637,483
Unrealized currency gain								802,973
*Net fair value		714,784		99,717		n/a		1,617,474

* This amount comprises the “Net unrealized gain (loss) on open contracts” on the Statements of Financial Condition.

During the period January 1, 2013 to September 30, 2013, and the twelve months ended December 31, 2012, there were no Level 3 assets and liabilities, and there were no transfers of assets or liabilities between Level 1 and Level 2.

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Organization

9 Months Ended

Sep. 30, 2013

Organization [Abstract]

Organization

1. Organization

Morgan Stanley Smith Barney Charter Aspect L.P. is a Delaware limited partnership organized in 1993 to engage primarily in the speculative trading of futures contracts, options on futures and forward contracts, and forward contracts on physical commodities and other commodity interests, including, but not limited to, foreign currencies, financial instruments, metals, energy, and agricultural products (collectively, “Futures Interests”) (refer to Note 4. Financial Instruments).  The Partnership is one of the Morgan Stanley Charter series of funds, comprised of the Partnership, Morgan Stanley Smith Barney Charter WNT L.P., and Morgan Stanley Smith Barney Charter Campbell L.P. (collectively, the “Charter Series”).

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 Morgan Stanley Smith Barney Holdings LLC (“MSSBH”).  MSSBH is wholly-owned indirectly by Morgan Stanley.  Prior to June 2013, Citigroup Inc. was the indirect minority owner of MSSBH.  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 commodity broker for the Partnership.  Morgan Stanley Wealth Management is a principal subsidiary of MSSBH.

The clearing commodity broker is Morgan Stanley & Co. LLC (“MS&Co.”).  MS&Co. also acts as the counterparty on all trading of foreign currency forward contracts.  MS&Co. is a wholly-owned subsidiary of Morgan Stanley.  Aspect Capital Limited (“Aspect” or the “Trading Advisor”) is the trading advisor to the Partnership.

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Derivatives and Hedging (Tables)

9 Months Ended

Sep. 30, 2013

Derivative Instruments and Hedging Activities, Disclosures [Line Items]

Offsetting Of Derivative Assets And Liabilities

The following tables summarize the valuation of the Partnership’s investments as of September 30, 2013 and December 31, 2012, respectively.

Offsetting of Derivative Assets and Liabilities as of September 30, 2013:

	Gross Amounts Recognized		Gross Amounts Offset in the Statement of Financial Condition			Net Amounts Presented in the Statement of Financial Condition
		$		$			$
Assets
Futures		424,181		(611,981	)		(187,800	)
Forwards		336,142		(31,723	)		304,419
Total Assets		760,323		(643,704	)		116,619
Liabilities
Futures		434,811		(1,216,187	)		(781,376	)
Forwards		9,365		(202,404	)		(193,039	)
Total Liabilities		444,176		(1,418,591	)		(974,415	)
Unrealized currency gain							834,958
Total net unrealized loss on open contracts							(22,838	)

Offsetting of Derivative Assets and Liabilities as of December 31, 2012:

	Gross Amounts Recognized		Gross Amounts Offset in the Statement of Financial Condition			Net Amounts Presented in the Statement of Financial Condition
		$		$			$
Assets
Futures		1,295,413		(720,472	)		574,941
Forwards		209,506		(348,058	)		(138,552	)
Total Assets		1,504,919		(1,068,530	)		436,389
Liabilities
Futures		521,699		(381,857	)		139,842
Forwards		425,366		(187,096	)		238,270
Total Liabilities		947,065		(568,953	)		378,112
Unrealized currency gain							802,973
Net unrealized gain on open contracts							1,617,474

Schedule of Effect of Trading Activities on the Statements of Financial Condition

The Effect of Trading Activities on the Statements of Financial Condition as of September 30, 2013:

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 nine months (absolute quantity)
	$		$			$		$			$
Commodity		51,438		(329,871	)		433,281		(306,082	)		(151,234	)		936
Equity		120,614		(262,194	)		1,530		–			(140,050	)		561
Foreign currency		340,679		(31,723	)		9,365		(208,903	)		109,418			803
Interest rate		247,592		(19,916	)		–		(903,606	)		(675,930	)		1,522
Total		760,323		(643,704	)		444,176		(1,418,591	)		(857,796	)
Unrealized currency gain												834,958
Total net unrealized loss on open contracts												(22,838	)

The Effect of Trading Activities on the Statements of Financial Condition as of December 31, 2012:

Futures and Forward Contracts	Long Unrealized Gain		Long Unrealized Loss			Short Unrealized Gain		Short Unrealized Loss			Net Unrealized Gain/(Loss)			Average number of contracts outstanding for the year (absolute quantity)
	$		$			$		$			$
Commodity		146,738		(309,360	)		497,636		(366,534	)		(31,520	)		858
Equity		731,889		(35,125	)		–		(7,075	)		689,689			592
Foreign currency		215,614		(357,045	)		448,109		(187,096	)		119,582			936
Interest rate		410,678		(367,000	)		1,320		(8,248	)		36,750			2,731
Total		1,504,919		(1,068,530	)		947,065		(568,953	)		814,501
Unrealized currency gain												802,973
Net unrealized gain on open contracts												1,617,474

Schedule of Effect of Trading Activities on the Statements of Income and Expenses

The Effect of Trading Activities on the Statements of Income and Expenses for the Three and Nine Months Ended September 30, 2013 included in Total Trading Results:

	For the Three Months			For the Nine Months
	Ended September 30, 2013			Ended September 30, 2013
Type of Instrument	$			$
Commodity		(2,537,638	)		(258,887	)
Equity		367,650			3,054,049
Foreign currency		(409,100	)		(1,759,590	)
Interest rate		(858,721	)		(4,034,042	)
Unrealized currency gain		1,036			31,986
Total		(3,436,773	)		(2,966,484	)

Line Items on the Statements of Income and Expenses for the Three and Nine Months Ended September 30, 2013:

	For the Three Months			For the Nine Months
	Ended September 30, 2013			Ended September 30, 2013
Trading Results	$			$
Net realized		(413,837	)		(1,326,172	)
Net change in unrealized		(3,022,936	)		(1,640,312	)
Total Trading Results		(3,436,773	)		(2,966,484	)

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

	For the Three Months			For the Nine Months
	Ended September 30, 2012			Ended September 30, 2012
Type of Instrument	$			$
Commodity		(2,690,378	)		(1,850,378	)
Equity		(745,518	)		(2,835,325	)
Foreign currency		672,460			(1,811,920	)
Interest rate		779,189			3,929,390
Unrealized currency loss		(25,407	)		(42,986	)
Total		(2,009,654	)		(2,611,219	)

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

	For the Three Months			For the Nine Months
	Ended September 30, 2012			Ended September 30, 2012
Trading Results	$			$
Net realized		(3,632,579	)		(88,313	)
Net change in unrealized		1,622,925			(2,522,906	)
Total Trading Results		(2,009,654	)		(2,611,219	)

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Income Taxes

9 Months Ended

Sep. 30, 2013

Income Taxes [Abstract]

Income Taxes

9. Income Taxes

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

The guidance issued by the FASB on income taxes clarifies the accounting for uncertainty in income taxes recognized in the Partnership's financial statements, and prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken.  The Partnership has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements as of September 30, 2013 and December 31, 2012.  If applicable, the Partnership recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in other expenses in the Statements of Income and Expenses. Generally, the 2010 through 2012 tax years remain subject to examination by U.S. federal and most state tax authorities.  No income tax returns are currently under examination.

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Related Party Transactions (Details)	9 Months Ended
	Sep. 30, 2013
Related Party Transactions [Abstract]
Percentage of interest paid on average daily equity maintained in cash in partnership account (in hundredths)	100.00%
Percentage monthly average of 4-week U.S. Treasury bill discount rate (in hundredths)	80.00%

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Fair Value Measurements and Disclosures (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Measurements and Disclosures, Disclosure [Line Items]

Assets and Liabilities Measured at Fair Value on a Recurring Basis

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

September 30, 2013	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		858,992			–		n/a		858,992
Forwards		–			345,507		n/a		345,507
Total Assets		858,992			345,507		n/a		1,204,499
Liabilities
Futures		1,828,168			–		n/a		1,828,168
Forwards		–			234,127		n/a		234,127
Total Liabilities		1,828,168			234,127		n/a		2,062,295
Unrealized currency gain									834,958
*Net fair value		(969,176	)		111,380		n/a		(22,838	)

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		1,817,113		–		n/a		1,817,113
Forwards		–		634,871		n/a		634,871
Total Assets		1,817,113		634,871		n/a		2,451,984
Liabilities
Futures		1,102,329		–		n/a		1,102,329
Forwards		–		535,154		n/a		535,154
Total Liabilities		1,102,329		535,154		n/a		1,637,483
Unrealized currency gain								802,973
*Net fair value		714,784		99,717		n/a		1,617,474

* This amount comprises the “Net unrealized gain (loss) on open contracts” on the Statements of Financial Condition.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	MORGAN STANLEY SMITH BARNEY CHARTER ASPECT L.P.
Entity Central Index Key	0000914747
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding	2,943,012.703
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013

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Financial Highlights (Details) (USD $)	3 Months Ended				9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012		Sep. 30, 2013		Sep. 30, 2012
Per Unit operating performance: [Abstract]
Net asset value at the beginning of the period (in dollars per unit)	$ 17.25		$ 19.90		$ 17.83		$ 20.94
Interest Income (in dollars per unit)	$ 0	[1]	$ 0	[1]	$ 0.01		$ 0.01
Expenses (in dollars per unit)	$ (0.32)		$ (0.38)		$ (1.00)		$ (1.23)
Realized/Unrealized Loss (in dollars per unit )	$ (1.12)	[2]	$ (0.53)	[2]	$ (1.03)	[2]	$ (0.73)	[2]
Net Loss (in dollars per unit)	$ (1.44)	[3]	$ (0.91)	[3]	$ (2.02)	[3]	$ (1.95)	[3]
Net asset value at the end of the period (in dollars per unit)	$ 15.81		$ 18.99		$ 15.81		$ 18.99
Ratios to average net assets: [Abstract]
Net Investment Loss (in hundredths)	(7.80%)	[4]	(7.60%)	[4]	(7.70%)	[4]	(8.00%)	[4]
Expenses before Incentive Fees (in hundredths)	7.80%	[4]	7.70%	[4]	7.80%	[4]	8.00%	[4]
Expenses after Incentive Fees (in hundredths)	7.80%	[4]	7.70%	[4]	7.80%	[4]	8.00%	[4]
Net Loss (in hundredths)	(35.30%)	[4]	(18.10%)	[4]	(14.90%)	[4]	(12.10%)	[4]
Total return before incentive fees (in hundredths)	(8.30%)		(4.60%)		(11.30%)		(9.30%)
Total return after incentive fees (in hundredths)	(8.30%)		(4.60%)		(11.30%)		(9.30%)
Amount is less than (in dollars per unit)	$ 0.005		$ 0.005		$ 0.005		$ 0.005

[1] Amounts less than $0.005 per Unit.

[2] Realized/Unrealized Loss is a balancing amount necessary to reconcile the change in net asset value per Unit with the other per Unit information.

[3] Based on change in net asset value per Unit.

[4] Annualized (except for incentive fees if applicable).