-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Vw0/6CGiJALeKvqKyboiXEZo/AWhLyBPbTpw3RcJx94BWkmgX2UT40qGVzTsdTCB p2SpCNrDi/3Jr9zNIxC+0A== 0000925306-03-000001.txt : 20030814 0000925306-03-000001.hdr.sgml : 20030814 20030814130742 ACCESSION NUMBER: 0000925306-03-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY SPECTRUM TECHNICAL LP CENTRAL INDEX KEY: 0000925306 STANDARD INDUSTRIAL CLASSIFICATION: [6221] IRS NUMBER: 133782231 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-26338 FILM NUMBER: 03845374 BUSINESS ADDRESS: STREET 1: 1221 AVE. OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10020 BUSINESS PHONE: 2127626549 MAIL ADDRESS: STREET 1: 1221 AVE. OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10020 FORMER COMPANY: FORMER CONFORMED NAME: MORGAN STANLEY DEAN WITTER SPECTRUM TECHNICAL LP DATE OF NAME CHANGE: 19990412 FORMER COMPANY: FORMER CONFORMED NAME: WITTER DEAN SPECTRUM TECHNICAL LP DATE OF NAME CHANGE: 19940614 10-Q 1 dwstt.txt SPECTRUM TECHNICAL UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2003 or [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to__________________ Commission File Number 0-26338 MORGAN STANLEY SPECTRUM TECHNICAL L.P. (Exact name of registrant as specified in its charter) Delaware 13-3782231 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Demeter Management Corporation 825 Third Avenue, 9th Floor New York, NY 10022 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (212) 310-6444 (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___________ MORGAN STANLEY SPECTRUM TECHNICAL L.P. INDEX TO QUARTERLY REPORT ON FORM 10-Q June 30, 2003
PART I. FINANCIAL INFORMATION Item 1. Financial Statements Statements of Financial Condition as of June 30, 2003 (Unaudited) and December 31, 2002 2 Statements of Operations for the Quarters Ended June 30, 2003 and 2002 (Unaudited) 3 Statements of Operations for the Six Months Ended June 30, 2003 and 2002 (Unaudited) 4 Statements of Changes in Partners? Capital for the Six Months Ended June 30, 2003 and 2002 (Unaudited) 5 Statements of Cash Flows for the Six Months Ended June 30, 2003 and 2002 (Unaudited) 6 Notes to Financial Statements (Unaudited) 7-11 Item 2. Management?s Discussion and Analysis of Financial Condition and Results of Operations 12-21 Item 3. Quantitative and Qualitative Disclosures about Market Risk 22-34 Item 4. Controls and Procedures 35 Part II. OTHER INFORMATION Item 1. Legal Proceedings 36 Item 2. Changes in Securities and Use of Proceeds 36-38 Item 5. Other Information 38 Item 6. Exhibits and Reports on Form 8-K 39-41
PART I. FINANCIAL INFORMATION Item 1. Financial Statements MORGAN STANLEY SPECTRUM TECHNICAL L.P. STATEMENTS OF FINANCIAL CONDITION
June 30, December 31, 2003 2002 $ $ (Unaudited) ASSETS Equity in futures interests trading accounts: Cash 431,323,324 310,115,973 Net unrealized loss on open contracts (MSIL) (4,963,535) (3,069,013) Net unrealized gain (loss) on open contracts (MS & Co.) (18,725,097) 27,172,226 Total net unrealized gain (loss) on open contracts (23,688,632) 24,103,213 Total Trading Equity 407,634,692 334,219,186 Subscriptions receivable 14,800,218 7,108,790 Interest receivable (Morgan Stanley DW) 301,707 268,836 Total Assets 422,736,617 341,596,812 LIABILITIES AND PARTNERS' CAPITAL Liabilities Redemptions payable 4,668,681 3,195,919 Accrued brokerage fees (Morgan Stanley DW) 2,639,378 1,906,305 Accrued management fees 937,994 672,962 Total Liabilities 8,246,053 5,775,186 Partners? Capital Limited Partners (20,415,134.819 and 18,038,726.045 Units, respectively) 409,938,741 332,124,550 General Partner (226,682.847 and 200,799.812 Units, respectively) 4,551,823 3,697,076 Total Partners? Capital 414,490,564 335,821,626 Total Liabilities and Partners? Capital 422,736,617 341,596,812 NET ASSET VALUE PER UNIT 20.08 18.41 The accompanying notes are an integral part of these financial statements.
MORGAN STANLEY SPECTRUM TECHNICAL L.P. STATEMENTS OF OPERATIONS (Unaudited)
For the Quarters Ended June 30, 2003 2002 $ $ REVENUES Trading profit (loss): Realized 24,067,991 23,995,890 Net change in unrealized (15,531,205) 23,284,245 Total Trading Results 8,536,786 47,280,135 Interest income (Morgan Stanley DW) 904,245 820,064 Total 9,441,031 48,100,199 EXPENSES Brokerage fees (Morgan Stanley DW) 7,434,009 4,341,764 Management fees 2,636,721 1,586,206 Incentive fees 416,627 ? Total 10,487,357 5,927,970 NET INCOME (LOSS) (1,046,326) 42,172,229 NET INCOME (LOSS) ALLOCATION Limited Partners (1,042,803) 41,710,967 General Partner (3,523) 461,262 NET INCOME (LOSS) PER UNIT Limited Partners (0.02) 2.42 General Partner (0.02) 2.42 The accompanying notes are an integral part of these financial statements.
MORGAN STANLEY SPECTRUM TECHNICAL L.P. STATEMENTS OF OPERATIONS (Unaudited)
For the Six Months Ended June 30, 2003 2002 $ $ REVENUES Trading profit (loss): Realized 100,864,533 9,487,002 Net change in unrealized (47,791,845) 22,657,394 Total Trading Results 53,072,688 32,144,396 Interest income (Morgan Stanley DW) 1,753,710 1,657,142 Total 54,826,398 33,801,538 EXPENSES Brokerage fees (Morgan Stanley DW) 14,323,091 8,937,631 Incentive fees 6,733,578 - Management fees 5,073,943 3,341,708 Total 26,130,612 12,279,339 NET INCOME 28,695,786 21,522,199 NET INCOME ALLOCATION Limited Partners 28,361,039 21,287,552 General Partner 334,747 234,647 NET INCOME PER UNIT Limited Partners 1.67 1.23 General Partner 1.67 1.23 The accompanying notes are an integral part of these financial statements.
MORGAN STANLEY SPECTRUM TECHNICAL L.P. STATEMENTS OF CHANGES IN PARTNERS? CAPITAL For the Six Months Ended June 30, 2003 and 2002 (Unaudited)
Units of Partnership Limited General Interest Partners Partner Total $ $ $ Partners? Capital, December 31, 2001 17,280,496.201 255,122,417 2,851,705 257,974,122 Offering of Units 1,511,927.240 21,504,955 ? 21,504,955 Net Income ? 21,287,552 234,647 21,522,199 Redemptions (1,348,418.383) (19,158,353) ? (19,158,353) Partners? Capital, June 30, 2002 17,444,005.058 278,756,571 3,086,352 281,842,923 Partners? Capital, December 31, 2002 18,239,525.857 332,124,550 3,697,076 335,821,626 Offering of Units 3,643,863.939 75,205,941 520,000 75,725,941 Net Income ? 28,361,039 334,747 28,695,786 Redemptions (1,241,572.130) (25,752,789) ? (25,752,789) Partners? Capital, June 30, 2003 20,641,817.666 409,938,741 4,551,823 414,490,564 The accompanying notes are an integral part of these financial statements.
MORGAN STANLEY SPECTRUM TECHNICAL L.P. STATEMENTS OF CASH FLOWS (Unaudited)
For the Six Months Ended June 30, 2003 2002 $ $ CASH FLOWS FROM OPERATING ACTIVITIES Net income 28,695,786 21,522,199 Noncash item included in net income: Net change in unrealized 47,791,845 (22,657,394) (Increase) decrease in operating assets: Interest receivable (Morgan Stanley DW) (32,871) 36,782 Increase (decrease) in operating liabilities: Accrued brokerage fees (Morgan Stanley DW) 733,073 (27,854) Accrued management fees 265,032 (57,677) Net cash provided by (used for) operating activities 77,452,865 (1,183,944) CASH FLOWS FROM FINANCING ACTIVITIES Offering of Units 75,725,941 21,504,955 (Increase) decrease in subscriptions receivable (7,691,428) 1,651,002 Increase in redemptions payable 1,472,762 627,129 Redemptions of Units (25,752,789) (19,158,353) Net cash provided by financing activities 43,754,486 4,624,733 Net increase in cash 121,207,351 3,440,789 Balance at beginning of period 310,115,973 246,172,354 Balance at end of period 431,323,324 249,613,143 The accompanying notes are an integral part of these financial statements.
MORGAN STANLEY SPECTRUM TECHNICAL L.P. NOTES TO FINANCIAL STATEMENTS June 30, 2003 (Unaudited) The unaudited financial statements contained herein include, in the opinion of management, all adjustments necessary for a fair presentation of the results of operations and financial condition of Morgan Stanley Spectrum Technical L.P. (the ?Partnership?). The financial statements and condensed notes herein should be read in conjunction with the Partnership?s December 31, 2002 Annual Report on Form 10-K. 1. Organization Morgan Stanley Spectrum Technical L.P. is a Delaware limited partnership organized to engage primarily in the speculative trading of futures contracts, options on futures 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. The Partnership is one of the Morgan Stanley Spectrum series of funds, comprised of the Partnership, Morgan Stanley Spectrum Currency L.P., Morgan Stanley Spectrum Global Balanced L.P., Morgan Stanley Spectrum Select L.P., and Morgan Stanley Spectrum Strategic L.P. The Partnership?s general partner is Demeter Management Corporation (?Demeter?). The non-clearing commodity broker is MORGAN STANLEY SPECTRUM TECHNICAL L.P. NOTES TO FINANCIAL STATEMENTS (CONTINUED) Morgan Stanley DW Inc. (?Morgan Stanley DW?). The clearing commodity brokers are Morgan Stanley & Co. Incorporated (?MS & Co.?) and Morgan Stanley & Co. International Limited (?MSIL?). Demeter, Morgan Stanley DW, MS & Co. and MSIL are wholly-owned subsidiaries of Morgan Stanley. The trading advisors to the Partnership are Campbell & Company, Inc., Chesapeake Capital Corporation, and John W. Henry & Company, Inc. (collectively, the ?Trading Advisors?). 2. Related Party Transactions The Partnership?s cash is on deposit with Morgan Stanley DW, MS & Co. and MSIL in futures, forwards, and options trading accounts to meet margin requirements as needed. Morgan Stanley DW pays interest on these funds based on a prevailing rate on U.S. Treasury bills. The Partnership pays brokerage fees to Morgan Stanley DW. 3. Financial Instruments The Partnership trades futures contracts, options on futures 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. Futures and forwards represent contracts for delayed delivery of an instrument at a specified date and MORGAN STANLEY SPECTRUM TECHNICAL L.P. NOTES TO FINANCIAL STATEMENTS (CONTINUED) price. 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 market value of these contracts, including interest rate volatility. The market value of contracts is based on closing prices quoted by the exchange, bank or clearing firm through which the contracts are traded. The Partnership?s contracts are accounted for on a trade-date basis and marked to market on a daily basis. The Partnership accounts for its derivative investments in accordance with the provisions of Statement of Financial Accounting Standards No. 133, ?Accounting for Derivative Instruments and Hedging Activities? (?SFAS No. 133?). SFAS No. 133 defines a derivative as a financial instrument or other contract that has all three of the following characteristics: 1) One or more underlying notional amounts or payment provisions; 2) Requires no initial net investment or a smaller initial net investment than would be required relative to changes in market factors; 3) Terms require or permit net settlement. MORGAN STANLEY SPECTRUM TECHNICAL L.P. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 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 ?Equity in futures interests trading accounts? on the statements of financial condition, and their longest contract maturities were as follows: Net Unrealized Gains (Losses) on Open Contracts Longest Maturities Exchange- Off-Exchange- Exchange- Off-Exchange- Date Traded Traded Total Traded Traded $ $ $ Jun. 30, 2003 (21,341,981) (2,346,651) (23,688,632) Jun. 2004 Sep. 2003 Dec. 31, 2002 16,269,250 7,833,963 24,103,213 Dec. 2003 Mar. 2003 The Partnership has credit risk associated with counterparty non- performance. The credit risk associated with the instruments in which the Partnership is involved is limited to the amounts reflected in the Partnership?s statements of financial condition. The Partnership also has credit risk because Morgan Stanley DW, MS & Co. and MSIL act as the futures commission merchants or the counterparties with respect to most of the Partnership?s assets. Exchange-traded futures and futures-styled options contracts are marked to market on a daily basis, with variations in value MORGAN STANLEY SPECTRUM TECHNICAL L.P. NOTES TO FINANCIAL STATEMENTS (CONCLUDED) settled on a daily basis. Each of Morgan Stanley DW, MS & Co. and MSIL, as a futures commission merchant for the Partnership?s exchange-traded futures and futures-styled options contracts, are required, pursuant to regulations of the Commodity Futures Trading Commission (?CFTC?), to segregate from their own assets, and for the sole benefit of their commodity customers, all funds held by them with respect to exchange-traded futures and futures- styled options contracts, including an amount equal to the net unrealized gains (losses) on all open futures and futures-styled options contracts, which funds, in the aggregate, totaled $409,981,343 and $326,385,223 at June 30, 2003 and December 31, 2002, respectively. With respect to the Partnership?s off- exchange-traded forward currency contracts, there are no daily settlements of variations in value nor is there any requirement that an amount equal to the net unrealized gains (losses) on open forward contracts be segregated. 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 of such contracts, to perform. The Partnership has a netting agreement with MS & Co. 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. Item 2. MANAGEMENT?S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity. The Partnership deposits its assets with Morgan Stanley DW as non-clearing broker, and MS & Co. and MSIL as clearing brokers in separate futures, forwards, and options trading accounts established for each trading advisor, which assets are used as margin to engage in 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. The Partnership?s assets held by the commodity brokers may be used as margin solely for the Partnership?s trading. 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 fluctuations limits? or ?daily limits?. Trades may not be executed at prices beyond the daily limit. If the price for a particular futures or option 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. 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. The Partnership has never had illiquidity affect a material portion of its assets. Furthermore, there are no material trends, demands, commitments, events or uncertainties known at the present time that will result in, or that are reasonably likely to result in, the Partnership?s liquidity increasing or decreasing in any material way. Capital Resources. The Partnership does not have, nor expect to have, any capital assets. Redemptions, exchanges and sales of additional units of limited partnership interest (?Unit(s)?) in the future will affect the amount of funds available for investment in futures, forwards, and options in subsequent periods. It is not possible to estimate the amount, and therefore the impact, of future redemptions 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. The Partnership has no off-balance sheet arrangements, nor contractual obligations or commercial commitments to make future payments that would affect the Partnership?s liquidity or capital resources. The contracts traded by the Partnership are accounted for on a trade-date basis and marked to market on a daily basis. The value of futures contracts is the settlement price on the exchange on which that futures contract is traded on a particular day and the value of foreign currency forward contracts is based on the spot rate as of the close of business, New York City time, on a given day. Results of Operations General. The Partnership?s results depend on the Trading Advisors and the ability of each Trading Advisor?s trading programs to take advantage of price movements or other profit opportunities in the futures, forwards, and options markets. The following presents a summary of the Partnership's operations for the three and six month periods ended June 30, 2003 and 2002 and a general discussion of its trading activities during each period. It is important to note, however, that the Trading Advisors trade in various markets at different times and that prior activity in a particular market does not mean that such market will be actively traded by the Trading Advisors or will be profitable in the future. Consequently, the results of operations of the Partnership are difficult to discuss other than in the context of the Trading Advisors? trading activities on behalf of the Partnership and how the Partnership has performed in the past. The Partnership?s results of operations set forth in the financial statements on pages 2 through 11 of this report were prepared in accordance with accounting principles generally accepted in the United States of America, which require the use of certain accounting policies that affect the amounts reported in these financial statements, including the following: The contracts the Partnership trades are accounted for on a trade-date basis and marked to market on a daily basis. The difference between their cost and market value is recorded on the Statements of Operations as ?Net change in unrealized profit/loss? for open (unrealized) contracts, and recorded as ?Realized profit/loss? when open positions are closed out, and the sum of these amounts constitutes the Partnership?s trading revenues. Interest income revenue, as well as management fees, incentive fees and brokerage fees expenses of the Partnership are recorded on an accrual basis. Demeter 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 Quarter and Six Months Ended June 30, 2003 For the quarter ended June 30, 2003, the Partnership recorded total trading revenues, including interest income, of $9,441,031 and, after expenses, posted a decrease in net asset value per Unit. The most significant losses of approximately 2.1% were incurred in the metals markets, primarily during June, from long gold futures positions as prices dropped counter to the rise of the U.S. dollar. Further losses in this sector were provided by long positions in aluminum and copper futures as prices declined in anticipation of the U.S. Federal Reserve?s interest rate cut and on technically based selling. Additional losses of approximately 2.0% in the agricultural markets were recorded primarily during June from short futures positions in cotton as supply concerns triggered by adverse weather conditions in the U.S. and increased exports forced cotton prices higher. Further losses in this sector were experienced from long lean hog futures positions as fears related to a potential outbreak of Mad Cow Disease depressed prices. Smaller losses of approximately 0.5% in the global stock index markets resulted during May from positions in Japanese stock index futures as prices reversed higher amid heavy buying by Japanese pension funds and renewed hope for a government stimulus package. A portion of the Partnership?s overall losses for the second quarter was offset by gains of approximately 5.5% in the currency markets during April from long positions in the euro versus the U.S. dollar as concerns regarding the U.S. economic recovery resurfaced and resulted in the value of the dollar declining to a four-year low versus the euro. Long positions in the euro versus the U.S. dollar provided additional gains during May as the value of the euro strengthened to an all-time high amid uncertainty regarding the Bush Administration?s economic policy, renewed fears of potential terrorist attacks against American interests, and investor preference for non-U.S. dollar denominated assets. Currency gains were also recorded from long positions in the Australian dollar versus the U.S. dollar as its value strengthened in response to continued weakness in the U.S. dollar and significant interest rate differentials between the two countries. Additional gains of approximately 2.1% in the global interest rate markets were recorded primarily during May from long positions in U.S. and European interest rate futures as prices trended higher amid speculation of an interest rate cut by the Federal Reserve and lingering doubts concerning a global economic recovery. Total expenses for the three months ended June 30, 2003 were $10,487,357, resulting in a net loss of $1,046,326. The net asset value of a Unit decreased from $20.10 at March 31, 2003 to $20.08 at June 30, 2003. For the six months ended June 30, 2003, the Partnership recorded total trading revenues, including interest income, of $54,826,398 and posted an increase in net asset value per Unit. The most significant gains of approximately 10.9% in the currency markets were supplied during January from long positions in the euro as its value strengthened versus the U.S. dollar amid renewed fears of a military conflict with Iraq, increased tensions with North Korea, and weak U.S. economic data. During May, additional gains were recorded as the value of the euro strengthened to an all-time high amid uncertainty regarding the Bush Administration?s economic policy, renewed fears of potential terrorist attacks against American interests, and investor preference for non-U.S. dollar denominated assets. Gains were also recorded from long positions in the Australian dollar versus the U.S. dollar as the Australian currency strengthened in response to continued weakness in the U.S. dollar and a significant interest rate differential between the two countries. Additional gains of approximately 6.2% in the global interest rate markets were recorded during January and February from positions in U.S. interest rate futures as prices declined amid a temporary increase in U.S. manufacturing activity and then increased as investors continued to seek the ?safe haven? of fixed income investments in response to prolonged uncertainty in global equity markets. Additional gains were recorded from long positions in European and U.S. interest rate futures as strong demand from investors seeking the security of fixed income investments sent prices higher. During May, gains were provided from long positions in U.S. and European interest rate futures as prices trended higher amid speculation of an interest rate cut by the U.S. Federal Reserve and lingering doubts concerning a global economic recovery. Gains of approximately 3.8% were recorded in the energy markets during January and February from long positions in natural gas futures as prices increased in response to prolonged frigid temperatures in the northeastern and midwestern United States and fears that extremely cold weather could further deplete already diminished supplies. Additional gains were provided from long positions in crude oil futures as prices trended higher amid fears that a military conflict with Iraq could curb market supply. A portion of the Partnership?s gains was offset by losses of approximately 2.5% in the metals markets from long positions in aluminum futures as prices fell amid muted industrial demand during March. During June, long positions in aluminum futures incurred additional losses as prices declined in anticipation of the U.S. Federal Reserve?s interest rate cut and on technically based selling. Further losses in this sector were provided by long gold futures positions as prices dropped counter to the rise of the U.S. dollar. Additional losses of approximately 2.4% stemmed from the agricultural markets, primarily during June, as short futures positions in cotton suffered losses due to an increase in prices spurred by supply concerns. Total expenses for the six months ended June 30, 2003 were $26,130,612, resulting in net income of $28,695,786. The net asset value of a Unit increased from $18.41 at December 31, 2002 to $20.08 at June 30, 2003. For the Quarter and Six Months Ended June 30, 2002 For the quarter ended June 30, 2002, the Partnership recorded total trading revenues, including interest income, of $48,100,199 and posted an increase in net asset value per Unit. The most significant gains of approximately 20.6% were recorded in the currency markets primarily during May and June from previously established long positions in the euro, Swiss franc and Japanese yen relative to the U.S. dollar as the value of these currencies strengthened against the dollar amid falling equity prices, concerns regarding corporate accounting integrity, and weak economic data. Additional gains of approximately 1.3% were recorded in the global stock index futures markets from short positions in European stock index futures as prices trended lower on geopolitical concerns and uncertainty surrounding a global economic recovery. A portion of the Partnership?s overall gains for the quarter was offset by losses of approximately 2.2% in the energy markets primarily from previously established long futures positions in crude oil and its related products as prices moved lower during May on supply and demand concerns. Smaller losses of approximately 1.0% were recorded in the metals markets primarily during April, as copper prices reversed lower early in the month amid increasing tensions in the Middle East, growing inventory levels and weakening demand, resulting in losses from previously established long futures positions. Total expenses for the three months ended June 30, 2002 were $5,927,970, resulting in net income of $42,172,229. The net asset value of a Unit increased from $13.74 at March 31, 2002 to $16.16 at June 30, 2002. For the six months ended June 30, 2002, the Partnership recorded total trading revenues, including interest income, of $33,801,538 and posted an increase in net asset value per Unit. The most significant gains of approximately 15.0% were recorded in the currency markets primarily during May and June from previously established long positions in the euro, Swiss franc and Japanese yen relative to the U.S. dollar as the value of these currencies strengthened against the U.S. dollar amid falling equity prices, concerns regarding corporate accounting integrity and weak economic data. Additional gains of approximately 0.5% were recorded in the energy markets primarily during March, as crude oil prices continued their upward trend amid escalating tensions in the Middle East, supply concerns and signs of a rebound in the economic demand for oil, thus resulting in profits from previously established long futures positions. A portion of the Partnership?s overall gains was offset by losses of approximately 0.9% in the metals markets primarily from short positions in aluminum futures as prices increased during April on signs of recovery in U.S. industrial production. Elsewhere in the metals markets, copper prices reversed lower early in April amid increasing tensions in the Middle East, growing inventory levels and weakening demand, resulting in losses from previously established long futures positions. Additional losses of approximately 0.8% were recorded in the global stock index futures markets primarily from long positions in Nikkei Index futures as Japanese equity prices reversed lower early in June. Total expenses for the six months ended June 30, 2002 were $12,279,339, resulting in net income of $21,522,199. The net asset value of a Unit increased from $14.93 at December 31, 2001 to $16.16 at June 30, 2002. 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 central, not incidental, to the Partnership?s main business activities. 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. Fluctuations in market risk based upon these factors result in frequent changes in the fair value of the Partnership?s open positions, and consequently, in its earnings and cash flow. The Partnership?s total market risk is influenced by a wide variety of factors, including the diversification among the Partnership?s open positions, the volatility present within the markets, and the liquidity of the markets. At different times, each of these factors may act to increase or decrease the market risk associated with the Partnership. The Partnership?s past performance is not necessarily indicative 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 may cause future losses and volatility (i.e., ?risk of ruin?) that far exceed the Partnership?s experience to date or any reasonable expectations based upon historical changes in market value. Quantifying the Partnership?s Trading Value at Risk The following quantitative disclosures regarding the Partnership?s market risk exposures contain ?forward-looking statements? within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). All quantitative disclosures in this section are deemed to be forward- looking statements for purposes of the safe harbor, except for statements of historical fact. The Partnership accounts for open positions on the basis of mark- to-market accounting principles. Any loss in the market value of the Partnership?s open positions is directly reflected in the Partnership?s earnings, whether realized or unrealized, and its cash flow. Profits and losses on open positions of exchange- traded futures, forwards, and options are settled daily through variation margin. The Partnership?s risk exposure in the market sectors traded by the Trading Advisors is estimated below in terms of Value at Risk (?VaR?). The VaR model used by the Partnership includes many variables that could change the market value of the Partnership?s trading portfolio. The Partnership estimates VaR using a model based upon historical simulation with a confidence level of 99%. Historical simulation involves constructing a distribution of hypothetical daily changes in the value of a trading portfolio. The VaR model takes into account linear exposures to price and interest rate risk. Market risks that are incorporated in the VaR model include equity and commodity prices, interest rates, foreign exchange rates, and correlation among these variables. The hypothetical changes in portfolio value are based on daily percentage changes observed in key market indices or other market factors (?market risk factors?) to which the portfolio is sensitive. The historical observation period of the Partnership?s VaR is approximately four years. The one-day 99% confidence level of the Partnership?s VaR corresponds to the negative change in portfolio value that, based on observed market risk factors, would have been exceeded once in 100 trading days. In other words, one-day VaR for a portfolio is a number such that losses in this portfolio are estimated to exceed the VaR only one day in 100. VaR typically does not represent the worst case outcome. VaR is calculated using historical simulation. Demeter uses approximately four years of daily market data (1,000 observations) and revalues its portfolio (using delta-gamma approximations) for each of the historical market moves that occurred over this time period. This generates a probability distribution of daily ?simulated profit and loss? outcomes. The VaR is the appropriate percentile of this distribution. For example, the 99% one-day VaR would represent the 10th worst outcome from Demeter?s simulated profit and loss series. The Partnership?s VaR computations are based on the risk representation of the underlying benchmark for each instrument or contract and do not distinguish between exchange and non- exchange-traded instruments and are also not based on exchange and/or dealer-based margin requirements. VaR models, including the Partnership?s, are continuously evolving as trading portfolios become more diverse and modeling techniques and systems capabilities improve. Please note that the VaR model is used to numerically quantify market risk for historic reporting purposes only and is not utilized by either Demeter or the Trading Advisors in their daily risk management activities. Please further note that VaR as described above may not be comparable to similarly titled measures used by other entities. The Partnership?s Value at Risk in Different Market Sectors The following table indicates the VaR associated with the Partnership?s open positions as a percentage of total net assets by primary market risk category at June 30, 2003 and 2002. At June 30, 2003 and 2002, the Partnership?s total capitalization was approximately $414 million and $282 million, respectively. Primary Market June 30, 2003 June 30, 2002 Risk Category Value at Risk Value at Risk Currency (1.59)% (2.59)% Interest Rate (1.35) (2.59) Equity (1.23) (1.08) Commodity (1.22) (0.70) Aggregate Value at Risk (2.72)% (4.11)% The VaR for a market category represents the one-day downside risk for the aggregate exposures associated with this market category. The Aggregate Value at Risk above represents the VaR of the Partnership?s open positions across all the market categories, and is less than the sum of the VaRs for all such market categories due to the diversification benefit across asset classes. The table above represents the VaR of the Partnership?s open positions at June 30, 2003 and 2002 only and is not necessarily representative of either the historic or future risk of an investment in the Partnership. Because the Partnership?s only business is the speculative trading of futures, forwards, and options, the composition of its trading portfolio can change significantly over any given time period, or even within a single trading day. Any changes in open positions could positively or negatively materially impact market risk as measured by VaR. The table below supplements the quarter-end VaR by presenting the Partnership?s high, low and average VaR, as a percentage of total net assets for the four quarterly reporting periods from July 1, 2002 through June 30, 2003. Primary Market Risk Category High Low Average Currency (2.14)% (0.61)% (1.30)% Interest Rate (1.78) (0.53) (1.23) Equity (1.23) (0.24) (0.63) Commodity (1.46) (0.39) (1.06) Aggregate Value at Risk (2.76)% (0.87)% (2.21)% Limitations on Value at Risk as an Assessment of Market Risk 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 to typically be many times the total capitalization of the Partnership. The value of the Partnership?s open positions thus creates a ?risk of ruin? not typically found in other investments. The relative size of the positions held may cause the Partnership to incur losses greatly in excess of VaR within a short period of time, given the effects of the leverage employed and market volatility. The VaR tables above, as well as the past performance of the Partnership, give no indication of such ?risk of ruin?. In addition, VaR risk measures should be viewed in light of the methodology?s limitations, which include 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 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. The VaR tables above present the results of the Partnership?s VaR for each of the Partnership?s market risk exposures and on an aggregate basis at June 30, 2003 and 2002, and for the end of the four quarterly reporting periods from July 1, 2002 through June 30, 2003. Since VaR is based on historical data, VaR should not be viewed as predictive of the Partnership?s future financial performance or its ability to manage or monitor risk. There can be no assurance that the Partnership?s actual losses on a particular day will not exceed the VaR amounts indicated above or that such losses will not occur more than once in 100 trading days. Non-Trading 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. At June 30, 2003, the Partnership?s cash balance at Morgan Stanley DW was approximately 88% of its total net asset value. A decline in short-term interest rates will result in a decline in the Partnership?s cash management income. This cash flow risk is not considered to be material. Materiality, as used throughout this section, is based on an assessment of reasonably possible market movements and any associated potential losses, taking into account the leverage, optionality and multiplier features of the Partnership?s market- sensitive instruments, in relation to the Partnership?s net assets. Qualitative Disclosures Regarding Primary Trading Risk Exposures The following qualitative disclosures regarding the Partnership?s market risk exposures ? except for (A) those disclosures that are statements of historical fact and (B) the descriptions of how the Partnership 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 Demeter and the Trading Advisors for managing such exposures are subject to numerous uncertainties, contingencies and risks, any one of which could cause the actual results of the Partnership?s risk controls to differ materially from the objectives of such strategies. Government interventions, defaults and expro- priations, illiquid markets, the emergence of dominant fundamental factors, political upheavals, changes in historical price relationships, an influx of new market participants, increased regulation and many other factors could result in material losses as well as in material changes to the risk exposures and the risk management strategies of the Partnership. Investors must be prepared to lose all or substantially all of their investment in the Partnership. The following were the primary trading risk exposures of the Partnership at June 30, 2003, by market sector. It may be anticipated, however, that these market exposures will vary materially over time. Currency. The primary market exposure of the Partnership at June 30, 2003 was to exchange rate fluctuations, primarily fluctuations which disrupt the historical pricing relationships between different currencies and currency pairs. Interest rate changes as well as political and general economic conditions influence these fluctuations. The Partnership trades a large number of currencies, including cross-rates - i.e., positions between two currencies other than the U.S. dollar. At June 30, 2003, the Partnership?s major exposures were to the euro, Japanese yen, Australian dollar, British pound, Swiss franc, Canadian dollar, Norwegian krone and Swedish krona currency crosses, as well as outright U.S. dollar positions. Outright positions consist of the U.S. dollar vs. other currencies. These other currencies include major and minor currencies. Demeter does not anticipate that the risk profile of the Partnership?s currency sector will change significantly in the future. The currency trading VaR figure includes foreign margin amounts converted into U.S. dollars with an incremental adjustment to reflect the exchange rate risk inherent to the U.S.-based Partnership in expressing VaR in a functional currency other than U.S. dollars. Interest Rate. At June 30, 2003 the Partnership had market exposure to the global interest rate complex. Exposure was primarily spread across the U.S., European and Japanese interest rate sectors. Interest rate movements directly affect the price of the sovereign bond futures positions held by the Partnership and indirectly affect the value of its stock index and currency positions. Interest rate movements in one country, as well as relative interest rate movements between countries, materially impact the Partnership?s profitability. The Partnership?s primary interest rate exposure is generally to interest rate fluctuations in the U.S. and the other G-7 countries. The G-7 countries consist of France, the U.S., Britain, Germany, Japan, Italy, and Canada. However, the Partnership also takes futures positions in the government debt of smaller nations ? e.g., Australia. Demeter anticipates that G-7 countries interest rates will remain the primary interest rate exposure of the Partnership for the foreseeable future. The speculative futures positions held by the Partnership may range from short to long-term instruments. Consequently, changes in short, medium or long-term interest rates may have an effect on the Partnership. Equity. At June 30, 2003, the Partnership had market exposure to equity price risk in the G-7 countries. The stock index futures traded by the Partnership are by law limited to futures on broadly?based indices. At June 30, 2003, the Partnership?s primary exposures were to the NASDAQ (U.S.), S&P 500 (U.S.), DAX (Germany), Dow Jones Industrial Average (U.S.) and Euro Stoxx 50 (Europe) stock indices. The Partnership is exposed to the risk of adverse price trends or static markets in the U.S., European and Japanese stock indices. Static markets would not cause major market changes but would make it difficult for the Partnership to avoid being ?whipsawed? into numerous small losses. Commodity. Energy. At June 30, 2003, the Partnership?s energy exposure was shared primarily by futures contracts in crude oil and its related products, and natural gas. Price movements in these markets result from political developments in the Middle East, weather patterns and other economic fundamentals. Significant profits and losses, which have been experienced in the past, are expected to continue to be experienced in the future. Natural gas has exhibited volatility in prices resulting from weather patterns and supply and demand factors and may continue in this choppy pattern. Metals. The Partnership's metals exposure at June 30, 2003 was to fluctuations in the price of precious metals, such as gold and silver, and base metals, such as copper, aluminum, nickel and zinc. Economic forces, supply and demand inequalities, geopolitical factors and market expectations influence price movements in these markets. The Trading Advisors, from time to time, take positions when market opportunities develop and Demeter anticipates that the Partnership will continue to do so. Soft Commodities and Agriculturals. At June 30, 2003, the Partnership had exposure to the markets that comprise these sectors. Most of the exposure was to the live cattle, lean hogs and coffee markets. Supply and demand inequalities, severe weather disruptions and market expectations affect price movements in these markets. Qualitative Disclosures Regarding Non-Trading Risk Exposure The following was the only non-trading risk exposure of the Partnership at June 30, 2003: Foreign Currency Balances. The Partnership?s primary foreign currency balances at June 30, 2003 were in euros, Japanese yen, Australian dollars and British pounds. The Partnership controls the non-trading risk of foreign currency balances by regularly converting them back into U.S. dollars upon liquidation of their respective positions. Qualitative Disclosures Regarding Means of Managing Risk Exposure The Partnership and the Trading Advisors, separately, attempt to manage the risk of the Partnership?s open positions in essentially the same manner in all market categories traded. Demeter attempts to manage market exposure by diversifying the Partnership?s assets among different Trading Advisors, each of whose strategies focus on different market sectors and trading approaches, and monitoring the performance of the Trading Advisors daily. In addition, the Trading Advisors establish diversification guidelines, often set in terms of the maximum margin to be committed to positions in any one market sector or market-sensitive instrument. Demeter monitors and controls the risk of the Partnership?s non- trading instrument, cash. Cash is the only Partnership investment directed by Demeter, rather than the Trading Advisors. Item 4. CONTROLS AND PROCEDURES (a) As of the end of the period covered by this quarterly report, the President and Chief Financial Officer of the general partner, Demeter, have evaluated the effectiveness of the Partnership?s disclosure controls and procedures (as defined in Rules 13a?15(e) and 15d? 15(e) of the Exchange Act), and have judged such controls and procedures to be effective. (b) There have been no significant changes in the Partnership?s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation. PART II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS None. Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS The Partnership, Morgan Stanley Spectrum Strategic L.P. (?Spectrum Strategic?) and Morgan Stanley Spectrum Global Balanced L.P. (?Spectrum Global Balanced?), collectively registered 10,000,000 Units pursuant to a Registration Statement on Form S-1, which became effective on September 15, 1994 (SEC File Number 33-80146). While such Units were not allocated among the Partnership, Spectrum Strategic, and Spectrum Global Balanced at that time, they were subsequently allocated for convenience purposes as follows: the Partnership 4,000,000, Spectrum Strategic 4,000,000, and Spectrum Global Balanced 2,000,000. The Partnership, Spectrum Strategic, and Spectrum Global Balanced collectively registered an additional 20,000,000 Units pursuant to a new Registration Statement on Form S-1, which became effective on January 31, 1996 (SEC File Number 333-00494); such Units were allocated as follows: the Partnership 9,000,000, Spectrum Strategic 6,000,000, and Spectrum Global Balanced 5,000,000. The Partnership, Spectrum Strategic, and Spectrum Global Balanced collectively registered an additional 8,500,000 Units pursuant to another Registration Statement on Form S-1, which became effective on April 30, 1996 (SEC File Number 333-3222); such Units were allocated as follows: the Partnership 5,000,000, Spectrum Strategic 2,500,000, and Spectrum Global Balanced 1,000,000. The Partnership registered an additional 5,000,000 Units pursuant to another Registration Statement on Form S-1, which became effective on May 11, 1998 (SEC File Number 333-47831). The Partnership registered an additional 10,000,000 Units pursuant to another Registration Statement on Form S-1, which became effective January 21, 1999 (SEC File Number 333-68779). The Partnership registered an additional 1,000,000 Units pursuant to another Registration Statement on Form S-1, which became effective on April 30, 2002 (SEC File Number 333-84652). The Partnership registered an additional 10,000,000 Units pursuant to another Registration Statement on Form S-1, which became effective on April 28, 2003 (SEC File Number 333-104001). The managing underwriter for the Partnership is Morgan Stanley DW. Units are continuously sold at monthly closings at a purchase price equal to 100% of the net asset value per Unit as of the close of business on the last day of each month. Through June 30, 2003, 34,409,364.231 Units were sold, leaving 9,590,635.769 Units unsold. The aggregate price of the Units sold through June 30, 2003 was $504,970,329. Since no expenses are chargeable against proceeds, 100% of the proceeds of the offering have been applied to the working capital of the Partnership for use in accordance with the ?Use of Proceeds? section of the prospectus included as a part of the above referenced Registration Statements. Item 5. OTHER INFORMATION Changes in Management. The following changes have been made to the Board of Directors and Officers of Demeter: Mr. Robert E. Murray resigned the position of Chairman of the Board of Directors of Demeter. Mr. Jeffrey A. Rothman, President and Director of Demeter, was named Chairman of the Board of Directors of Demeter. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (A) Exhibits 3.01 Form of Amended and Restated Limited Partnership Agreement of the Partnership is incorporated by reference to Exhibit A of the Partnership?s prospectus, dated April 28, 2003, filed with the Securities and Exchange Commission pursuant to Rule 424(b)(3) under the Securities Act of 1933 on May 7, 2003. 3.02 Certificate of Limited Partnership, dated April 18, 1994, is incorporated by reference to Exhibit 3.02 of the Partnership?s Registration Statement on Form S-1 (File No. 33-80146) filed with the Securities and Exchange Commission on June 10, 1994. 3.03 Certificate of Amendment of Certificate of Limited Partnership, dated April 6, 1999 (changing its name from Dean Witter Spectrum Technical L.P.), is incorporated by reference to Exhibit 3.03 of the Partnership?s Registration Statement on Form S-1 (File No. 333-68779) filed with the Securities and Exchange Commission on April 12, 1999. 3.04 Certificate of Amendment of Certificate of Limited Partnership, dated November 1, 2001 (changing its name from Morgan Stanley Dean Witter Spectrum Technical L.P.), is incorporated by reference to Exhibit 3.01 of the Partnership?s Form 8-K (File No. 0-26338) filed with the Securities and Exchange Commission on November 1, 2001. 10.01 Management Agreement, dated as of November 1, 1994, among the Partnership, Demeter, and Campbell & Company, Inc. is incorporated by reference to Exhibit 10.01 of the Partnership?s Form 10-K (File No. 0-26338) for fiscal year ended December 31, 1998 filed on March 31, 1999. 10.01(a) Amendment to Management Agreement, dated as of November 30, 2000, among the Partnership, Demeter, and Campbell & Company, Inc. is incorporated by reference to Exhibit 10.02 of the Partnership?s Form 8-K (File No. 0-26338) filed with the Securities and Exchange Commission on January 3, 2001. 10.02 Management Agreement, dated as of November 1, 1994, among the Partnership, Demeter, and Chesapeake Capital Corporation is incorporated by reference to Exhibit 10.02 of the Partnership?s Form 10-K (File No. 0-26338) for fiscal year ended December 31, 1998 filed on March 31, 1999. 10.03 Management Agreement, dated as of November 1, 1994, among the Partnership, Demeter, and John W. Henry & Co. is incorporated by reference to Exhibit 10.03 of the Partnership?s Form 10-K (File No. 0-26338) for fiscal year ended December 31, 1998 filed on March 31, 1999. 10.03(a) Amendment to Management Agreement, dated as of November 30, 2000, among the Partnership, Demeter, and John W. Henry & Company, Inc. is incorporated by reference to Exhibit 10.01 of the Partnership?s Form 8-K (File No. 0- 26338) filed with the Securities and Exchange Commission on January 3, 2001. 10.07 Form of Subscription and Exchange Agreement and Power of Attorney to be executed by each purchaser of Units is incorporated by reference to Exhibit B of the Partnership?s prospectus dated April 28, 2003, filed with the Securities and Exchange Commission pursuant to Rule 424(b)(3) under the Securities Act of 1993 on May 7, 2003. 10.08 Amended and Restated Escrow Agreement, dated as of March 10, 2000, among the Partnership, Morgan Stanley Spectrum Select L.P., Morgan Stanley Spectrum Strategic L.P., Morgan Stanley Spectrum Global Balanced L.P., Morgan Stanley Spectrum Currency L.P., Morgan Stanley Spectrum Commodity L.P., Morgan Stanley DW, and The Chase Manhattan Bank, the escrow agent, is incorporated by reference to Exhibit 10.08 of the Partnership?s Registration Statement on Form S-1 (File No. 333-68779) filed with the Securities and Exchange Commission on November 2, 2001. 10.09 Form of Subscription Agreement Update Form to be executed by purchasers of Units is incorporated by reference to Exhibit C of the Partnership?s prospectus, dated April 28, 2003, as filed with the Securities and Exchange Commission pursuant to Rule 424(b)(3) under the Securities Act of 1933 on May 7, 2003. 10.10 Amended and Restated Customer Agreement between the Partnership and Morgan Stanley DW, dated as of October 16, 2000, is incorporated by reference to Exhibit 10.01 of the Partnership?s Form 8-K (File 0-26338) filed with the Securities and Exchange Commission on November 1, 2001. 10.11 Commodity Futures Customer Agreement between MS & Co. and the Partnership, and acknowledged and agreed to by Morgan Stanley DW, dated as of June 6, 2000, is incorporated by reference to Exhibit 10.02 of the Partnership?s Form 8-K (File No. 0-26338) filed with the Securities and Exchange Commission on November 1, 2001. 10.12 Customer Agreement between the Partnership and MSIL, dated as of May 1, 2000, is incorporated by reference to Exhibit 10.04 of the Partnership?s Form 8-K (File No. 0-26338) filed with the Securities and Exchange Commission on November 1, 2001. 10.13 Foreign Exchange and Options Master Agreement between MS & Co. and the Partnership, dated as of April 30, 2000, is incorporated by reference to Exhibit 10.05 of the Partnership?s Form 8-K (File No. 0-26338) filed with the Securities and Exchange Commission on November 1, 2001. 10.14 Securities Account Control Agreement among the Partnership, MS & Co., and Morgan Stanley DW, dated as of May 1, 2000, is incorporated by reference to Exhibit 10.03 of the Partnership?s Form 8-K (File No. 0-26338) filed with the Securities and Exchange Commission on November 1, 2001. 31.01 Certification of President of Demeter Management Corporation, the general partner of the Partnership, pursuant to rules 13(a)-15(e) and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.02 Certification of Chief Financial Officer of Demeter Management Corporation, the general partner of the Partnership, pursuant to rules 13(a)-15(e) and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.01 Certification of President of Demeter Management Corporation, 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 Demeter Management Corporation, 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. (B) Reports on Form 8-K. ? None. 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 Spectrum Technical L.P. (Registrant) By: Demeter Management Corporation (General Partner) August 14, 2003 By: /s/Jeffrey D. Hahn Jeffrey D. Hahn Director and 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. EX-1 2 ex3101.txt EXHIBIT EXHIBIT 31.01 CERTIFICATIONS I, Jeffrey A. Rothman, President of Demeter Management Corporation ("Demeter"), the general partner of the registrant, certify that: 1. I have reviewed this quarterly report on Form 10-Q of the registrant; 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 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)) 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) 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 evaluations; and c) 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 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 Demeter'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: August 14, 2003 /s/ Jeffrey A. Rothman Jeffrey A. Rothman President, Demeter Management Corporation, general partner of the registrant EX-2 3 ex3102.txt EXHIBIT EXHIBIT 31.02 CERTIFICATIONS I, Jeffrey D. Hahn, Chief Financial Officer of Demeter Management Corporation ("Demeter"), the general partner of the registrant, certify that: 1. I have reviewed this quarterly report on Form 10-Q of the registrant; 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 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)) 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) 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 evaluations; and c) 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 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 Demeter's board of directors (or persons performing the equivalent function): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely 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: August 14, 2003 /s/Jeffrey D. Hahn Jeffrey D. Hahn Chief Financial Officer, Demeter Management Corporation, general partner of the registrant EX-3 4 dwstex3201.txt EXHIBIT EXHIBIT 32.01 CERTIFICATION 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 Spectrum Technical L.P. (the ?Partnership?) on Form 10-Q for the period ended June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the ?Report?), I, Jeffrey A. Rothman, President, Demeter Management Corporation, 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 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/Jeffrey A. Rothman Name: Jeffrey A. Rothman Title: President Date: August 14, 2003 EX-4 5 dwstex3202.txt EXHIBIT EXHIBIT 32.02 CERTIFICATION 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 Spectrum Technical L.P. (the ?Partnership?) on Form 10-Q for the period ended June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the ?Report?), I, Jeffrey D. Hahn, Chief Financial Officer, Demeter Management Corporation, 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 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/Jeffrey D. Hahn Name: Jeffrey D. Hahn Title: Chief Financial Officer Date: August 14, 2003 -----END PRIVACY-ENHANCED MESSAGE-----