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Filed Pursuant to Rule 424(b)3
Registration No. 333-24109
July 15, 1997
DEAN WITTER PORTFOLIO STRATEGY FUND L.P.
SUPPLEMENT TO PROSPECTUS DATED MAY 12, 1997
In May 1997 DWR and certain affiliates entered into an asset purchase
agreement with Carr Futures, Inc. ("CFI") (formerly Indosuez Carr Futures, Inc.)
to transfer to CFI all of DWR's futures and futures options execution, clearing
and research business and its foreign currency and bullion dealer trading
operations. The transfer of business includes futures exchange and clearinghouse
memberships, computer, data processing, communications and office equipment,
customer agreements, intellectual property, files and records and relevant
personnel. Pursuant to its obligations under the asset purchase agreement, DWR
currently is negotiating to transfer to CFI the clearing of futures and options
trades and the execution of foreign currency forward trades for DWR's existing
public and private commodity pools, including the Partnership.
The transfer of the Partnership's futures and options clearing and foreign
exchange execution business to CFI will not take place, however, until the
General Partner believes that CFI will be able to provide the same level of
services to the Partnership as currently provided by DWR and the General Partner
is satisfied with CFI's financial creditworthiness. The General Partner believes
that the arrangements being negotiated with CFI are fair and reasonable and,
assuming the negotiations are successfully concluded, does not anticipate
seeking other execution and clearing arrangements for the Partnership. If the
negotiations are not successful, other clearing facilities would be arranged.
While the arrangements are still being negotiated and the results of the
negotiations are not certain, it is expected that within the next few weeks the
foreign currency forward trades for the Partnership will be effected with CFI as
the counterparty in the same manner they are currently traded with DWR, and,
within the next few months, the futures and futures options trades for the
Partnership will be cleared through CFI. The Partnership will maintain an
account with DWR, where most of the Partnership's cash assets will be held, and
the Partnership will maintain a separate clearing account with CFI where the
Partnership's futures, options and foreign currency forward positions and margin
funds related thereto will be held. It is expected that the brokerage
commissions and transaction charges to the Partnership by DWR and CFI will not
be materially different from those charged by DWR, and, in any event, such
commissions and charges will be subject to the same caps as described in the
Prospectus. Further, while CFI's capital will be substantially less than DWR's
capital, DWR is negotiating to have CFI's ultimate parent, Caisse National de
Credit Agricole, one of the largest banks in the world, guarantee the payment
and performance of all of CFI's obligations to the Partnership. While there can
be no assurance that such guarantee will be given, the Partnership's business
will not be transferred to CFI until DWR and the General Partner are satisfied
with CFI's creditworthiness. In all other material respects, the offering of
Units and the operation of the Partnership will remain unchanged (including the
interest crediting arrangements).
Because it is expected that CFI will act as a futures broker for the
Partnership's account, CFTC rules require disclosure of all material legal
actions against CFI in the past five years. On July 31, 1992, a CFTC
Administrative Law Judge ("ALJ") ordered CFI to pay a former client of the firm
approximately $1.7 million in damages, plus interest and costs, based upon
certain alleged misrepresentations made by a former account executive. Al Baraka
Investment and Development Corp. vs. Indosuez Carr Futures, Inc. (CFTC Docket
No. 91-R-126). On May 3, 1993, the CFTC issued an Order of Summary Affirmance,
which affirmed the ALJ's decision, and the U.S. Court of Appeals for the Seventh
Circuit affirmed the CFTC order in June, 1994.
If the transfer to CFI of the Partnership's futures and futures options
clearing and foreign currency forward trading occurs, the risks described in the
Prospectus regarding DWR as the counterparty on the Partnership's foreign
currency forward contracts and as the commodity broker on the Partnership's
futures and futures options positions would then be applicable in respect of
CFI.
