SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTER ENDED: 9/30/03

COMMISSION FILE NUMBER: 333-52543

TUDOR FUND FOR EMPLOYEES L.P.

(Exact name of registrant as specified in its charter)

Delaware		13-3543779
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1275 King Street, Greenwich, Connecticut		06831
(Address of principal executive offices)		(Zip Code)

(203) 863-6700

(Registrant’s telephone number, including area code)

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 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. x YES NO ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). ¨ YES NO x

TUDOR FUND FOR EMPLOYEES L.P.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

		Page
	PART I
Item 1.	Financial Statements
	Statements of Financial Condition as of September 30, 2003 and December 31, 2002	3
	Condensed Schedule of Investments as of September 30, 2003	4
	Condensed Schedule of Investments as of December 31, 2002	5
	Statements of Operations for the three and nine months ended September 30, 2003 and 2002	6
	Statements of Changes in Partners’ Capital for the nine months ended September 30, 2003 and the year ended December 31, 2002	7
	Notes to Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	18

	PART II
Item 1.	Legal Proceedings	19
Item 2.	Changes in Securities and Use of Proceeds	19
Item 3.	Defaults Upon Senior Securities	19
Item 4.	Submission of Matters to a Vote of Security Holders	19
Item 5.	Other Information	19
Item 6.	Exhibits and Reports on Form 8-K	20
Signatures		21
Certifications

PART I—FINANCIAL INFORMATION

Item 1.—Financial Statements

TUDOR FUND FOR EMPLOYEES L.P.

STATEMENTS OF FINANCIAL CONDITION

	SEPTEMBER 30, 2003		DECEMBER 31, 2002
	(UNAUDITED)		(AUDITED)
Assets:
Cash and cash equivalents	$	49,335,264	$	45,498,833
Due from brokers		8,894,070		3,257,380

Total assets	$	58,229,334	$	48,756,213

Liabilities and partners’ capital:

Liabilities:
Pending partner additions	$	942,986	$	2,595,000
Redemptions payable		1,054,541		332,259
Incentive fee payable		482,958		107,676
Management fee payable		148,376		123,057
Accrued professional fees and other		203,770		235,475

Total liabilities		2,832,631		3,393,467

Partners’ capital:
Limited Partners, 20,000 units authorized and 4,487.650 and 3,990.202 issued and outstanding at September 30, 2003 and December 31, 2002		53,071,906		43,232,851
General Partner, 196.580 units issued and outstanding at September 30, 2003 and December 31, 2002		2,324,797		2,129,895

Total partners’ capital		55,396,703		45,362,746

Total liabilities and partners’ capital	$	58,229,334	$	48,756,213

Net asset value per unit	$	11,826.21	$	10,834.75

See accompanying notes to financial statements.

TUDOR FUND FOR EMPLOYEES L.P.

CONDENSED SCHEDULE OF INVESTMENTS

September 30, 2003 (UNAUDITED)

Description	Market Value			Percentage of Net Assets
Options

Commodity future options	$	5,610		0.01	%

Metal options		102,986		0.19

Total options		108,596		0.20


Futures
Equity index futures
North America		(29,046	)	(0.05	)
Asia		(1,077	)	0.00
Europe		695,681		1.25

Total equity index futures		665,558		1.20


Interest rate futures
North America		145,563		0.26
Europe		558,994		1.01

Total interest rate futures		704,557		1.27

Foreign exchange futures		(2,720	)	0.00

Commodity futures		49,640		0.09

Total futures		1,417,035		2.56


Swaps
Equity swaps
North America		(808,696	)	(1.46	)
Europe		564,721		1.02

Total equity swaps		(243,975	)	(0.44	)

Commodity swaps		(28,305	)	(0.05	)

Total swaps		(272,280	)	(0.49	)


Forwards
Foreign exchange forwards		257,110		0.46
Metal forwards		(26,678	)	(0.05	)

Total forwards		230,432		0.41

Total investments, at market value⁽¹⁾	$	1,483,783		2.68	%

⁽¹⁾	All such amounts are included in due from brokers on the statement of financial condition.

See accompanying notes to financial statements.

TUDOR FUND FOR EMPLOYEES L.P.

CONDENSED SCHEDULE OF INVESTMENTS

December 31, 2002 (AUDITED)

Description	Market Value			Percentage of Net Assets
Options
Interest rate swaptions
Europe	$	240,933		0.53	%

Total interest rate swaptions		240,933		0.53


Futures
Equity index futures
Asia		(3,382	)	(0.01	)

Total equity index futures		(3,382	)	(0.01	)


Interest rate futures
Europe		1,536		0.00

Total interest rate futures		1,536		0.00


Foreign exchange futures
North America		104,000		0.23

Total foreign exchange futures		104,000		0.23

Total futures		102,154		0.22


Forwards
Foreign exchange forwards
North America		2,042		0.00
Asia		167,459		0.38
Europe		24,348		0.05

Total foreign exchange forwards		193,849		0.43


Forward rate agreements
Europe		7,864		0.02

Total forward rate agreements		7,864		0.02

Total forwards		201,713		0.45

Total investments, at market value⁽¹⁾	$	544,800		1.20	%

⁽¹⁾	All such amounts are included in due from brokers on the statement of financial condition.

See accompanying notes to financial statements.

TUDOR FUND FOR EMPLOYEES L.P.

STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002

(UNAUDITED)

	THREE MONTHS ENDED SEPTEMBER 30,						NINE MONTHS ENDED SEPTEMBER 30,
	2003			2002			2003			2002
Investment income
Interest	$	136,473		$	189,599		$	438,211		$	507,309

Total investment income		136,473			189,599			438,211			507,309


Investment expenses
Interest		10,279			3,471			23,840			10,733
Brokerage commissions		88,215			75,480			284,844			254,882

Total investment expenses		98,494			78,951			308,684			265,615


Operating expenses
Management fee		218,074			172,607			626,512			479,255
Incentive fee		482,958			—			494,538			621,857
Professional fees and other		75,879			121,398			196,032			213,513

Total operating expenses		776,911			294,005			1,317,082			1,314,625

Net investment loss		(738,932	)		(183,357	)		(1,187,555	)		(1,072,931	)


Net realized and unrealized gains (losses) on trading activities
Net realized gain		4,501,619			242,353			5,498,622			8,416,584
Change in net unrealized appreciation (depreciation)		903,744			(819,403	)		840,428			(1,454,048	)

Net realized and unrealized gains (losses)		5,405,363			(577,050	)		6,339,050			6,962,536

Net increase (decrease) in net assets resulting from operations	$	4,666,431		$	(760,407	)	$	5,151,495		$	5,889,605

Limited Partners’ net increase (decrease) in net assets resulting from operations	$	4,480,740		$	(722,495	)	$	4,956,593		$	5,613,981
General Partner’s net increase (decrease) in net assets resulting from operations		185,691			(37,912	)		194,902			275,624

	$	4,666,431		$	(760,407	)	$	5,151,495		$	5,889,605

Change in Net Asset Value Per Unit	$	944.65		$	(192.85	)	$	991.46		$	1,402.14

Net increase (decrease) in Net Assets Per Unit	$	968.99		$	(183.17	)	$	1,084.76		$	1,467.81

See accompanying notes to financial statements.

TUDOR FUND FOR EMPLOYEES L.P.

STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 (UNAUDITED)

AND THE YEAR ENDED DECEMBER 31, 2002 (AUDITED)

	Limited Partners					General Partner			Total Capital			Net Asset Value Per Unit
	Units		Capital			Units	Capital		Total Capital			Net Asset Value Per Unit
Partners’ Capital, December 31, 2001	3,363.810		$	30,035,126		196.580	$	1,755,258	$	31,790,384		$	8,928.90
Net increase in net assets resulting from operations	—			7,705,191		—		374,637		8,079,828
TIC 401(k) Plan unit adjustment^(a)	32.951			—		—		—		—
Capital contributions	807.515			7,624,015		—		—		7,624,015
Capital redemptions	(214.074	)		(2,131,481	)	—		—		(2,131,481	)

Partners’ Capital, December 31, 2002^(b)	3,990.202			43,232,851		196.580		2,129,895		45,362,746		$	10,834.75
Net increase in net assets resulting from operations	—			4,956,593		—		194,902		5,151,495
TIC 401(k) Plan unit adjustment^(a)	22.964			—		—		—		—
Capital contributions	923.337			9,765,915		—		—		9,765,915
Capital redemptions	(448.853	)		(4,883,453	)	—		—		(4,883,453	)

Partners’ Capital, September 30, 2003^(b)	4,487.650		$	53,071,906		196.580	$	2,324,797	$	55,396,703		$	11,826.21

^(a)	See Note 3—Capital Accounts

^(b)	See Note 3—Redemption of Units

See accompanying notes to financial statements.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2003

(UNAUDITED)

1. Organization

Tudor Fund for Employees L.P. (the “Partnership”) was organized under the Delaware Revised Uniform Limited Partnership Act (the “Act”) on November 22, 1989, and commenced trading operations on July 2, 1990. Second Management LLC (the “General Partner”) is the general partner of the Partnership. Tudor Investment Corporation (“TIC”), an affiliate of the General Partner, acts as the trading advisor of the Partnership. The Partnership’s trading approach and resulting positions are also utilized by the proprietary and other customer accounts of TIC and its affiliates. The General Partner is registered with the Commodity Futures Trading Commission as a Commodity Pool Operator and a Commodity Trading Advisor and is a member of the National Futures Association in such capacities. Ownership of limited partnership units is restricted to either employees of TIC and its principals or its affiliates.

The objective of the Partnership is to realize capital appreciation through speculative trading of futures, forwards, equity and interest rate swaps, option contracts and other derivative instruments, including commodity interests (collectively, “derivative contracts”). The Partnership will terminate on December 31, 2010 or at an earlier date if certain conditions occur as outlined in the Second Amended and Restated Partnership Agreement dated as of May 22, 1996 (the “Limited Partnership Agreement”).

During any offering, the purchase price of a unit will be the net asset value per unit, as defined in the Limited Partnership Agreement, at the opening of business on the first business day of the month.

Duties of the General Partner

The General Partner acts as the commodity pool operator of the Partnership and is responsible for the selection and monitoring of the commodity trading advisors used by the Partnership. The General Partner is also responsible for the performance of all administrative services necessary to the Partnership’s operations.

Service Agreement

The Partnership has entered into an agreement with Citco Fund Services (U.S.A.) Inc. (the “Service Company”), under which the Service Company provides necessary accounting services to the Partnership, including maintenance of the financial books and records.

2. Summary of Significant Accounting Policies

Revenue Recognition and Valuation

Trading activities, including related revenues and expenses, are recorded on a trade date basis. Interest income and expense are recorded on an accrual basis.

Derivative Contracts

In the normal course of business, the Partnership enters into derivative contracts for trading. The Partnership values derivative contracts on the statements of financial condition at independent market values when readily available from major exchanges. Otherwise, valuations are based on independent broker quotations or pricing models that consider the time value of money, volatility, and the current market and contractual prices of the underlying financial instruments. Changes in value of derivative contracts are included in the statements of operations.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash held at banks and highly liquid instruments with maturities of one month or less, such as overnight time deposits. Cash consists principally of interest bearing time deposits with one European bank.

Due From Brokers

Due from brokers includes options market value and unrealized gains and losses on futures, swaps and forward contracts (as reflected on the condensed schedules of investments), as well as cash held at brokers net of margin debt balances.

Brokerage Commissions

These expenses represent all brokerage commissions, exchange, National Futures Association and other fees incurred in connection with the execution and clearance of derivative instruments.

2. Summary of Significant Accounting Policies (continued)

Incentive Fee

The Partnership pays TIC, as trading advisor, an incentive fee equal to 12% of the Net Trading Profits (as defined in the Limited Partnership Agreement), earned as of the end of each fiscal quarter of the Partnership. Since inception of the TIC 401(k) Savings and Profit-Sharing Plan (the “TIC 401(k) Plan”), TIC has waived its right to receive an incentive fee attributable to units of limited partnership interest held at the beginning of each month by the TIC 401(k) Plan (see Note 3).

Management Fee

The Partnership also pays TIC, for the performance of its duties, a monthly management fee equal to ¹/12 of 2% (2% per annum) of the Partnership’s net assets (as defined in the Limited Partnership Agreement). Since inception of the TIC 401(k) Plan, TIC has waived its right to receive a management fee attributable to units of limited partnership interest held at the beginning of each month by the TIC 401(k) Plan (see Note 3).

Foreign Currency Translation

The functional currency of the Partnership is the United States dollar. All other currencies are considered to be foreign. Assets and liabilities denominated in a currency other than the U.S. dollar are translated into U.S. dollars at the closing rate of exchange as reported by a major international bank. Purchases and sales of investments, and income and expenses denominated in currencies other than U.S. dollars, are translated at the rates of exchange on the respective dates of such transactions. Included in cash and due from brokers at September 30, 2003 and December 31, 2002 were non-US dollar currency balances with values of approximately $2.4 million and $1.2 million.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management believes that the estimates utilized in preparing the financial statements are reasonable and prudent; however, actual results could differ from these estimates.

Net Increase (Decrease) in Net Assets Per Unit

Net increase (decrease) in net assets per unit is computed by dividing net increase (decrease) in net assets by the monthly average of units outstanding at the beginning of each month.

New Accounting Pronouncement

On May 15, 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150, Accounting for Certain Instruments with Characteristics of both Liabilities and Equity (“SFAS 150”). This Statement establishes standards for classifying and measuring as liabilities certain financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity. SFAS 150 requires that financial instruments that are issued in the form of shares that are mandatorily redeemable on a fixed or determinable date or upon an event certain to occur be classified as liabilities. For SEC registrants deemed “non-public entities” under SFAS 150, SFAS 150 is effective for fiscal periods beginning after December 15, 2003. The Partnership will adopt SFAS 150 on January 1, 2004. As a result of adopting the new standard, the Partnership will reclassify those Partner Units that are redeemable upon an event certain (e.g., the death of the Partner) to liabilities from equity with subsequent returns on such units reflected on the statement of operations. Adoption of SFAS 150 will affect the presentation of the Partnership’s financial position and ratios to average net assets as a result of the reclassification, but it will have no impact on the value of Partner Units.

3. Capital Accounts

Subscriptions and Capital Contributions

Each partner, including the General Partner, has a capital account with an initial balance equal to the amount such partner paid for its units of partnership interest. The Partnership’s net assets are determined monthly, and any increase or decrease from the end of the preceding month is added to or subtracted from the capital accounts of the partners based on the ratio that the balance of each capital account bears in relation to the balance of all capital accounts as of the beginning of the month. The number of units held by the TIC 401(k) Plan will be restated as necessary for management and incentive fees attributable to units held at the beginning of each month by the TIC 401(k) Plan to equate the per unit value of the TIC 401(k) Plan’s capital account with the Partnership’s per unit value. The TIC 401(k) Plan’s equity in the Partnership as of October 1, 2003 and January 1, 2003 was $10,925,911 and $8,670,935.

The minimum subscription amount is $1,000 for new Limited Partners. Additional capital contributions may be made in increments of $1,000. Both subscriptions and contributions may be made quarterly, at the beginning of the respective quarter.

Pending Partner Additions

Pending partner additions is comprised of cash received prior to the end of the fiscal period indicated for which units were issued on October 1, 2003 and January 1, 2003. Pending partner additions do not participate in the earnings or losses of the Partnership until the related units are issued.

Redemptions Payable

Units are redeemable at the discretion of each Limited Partner, within limits and subject to the terms of the Limited Partnership Agreement. Effective July 31, 2002, redemptions of units may be made as of the last business day of any month subject to the following restrictions. Redemptions occurring on any month-end which is also a calendar quarter-end require written notice of redemption that must be received by the General Partner at least five business days in advance of such redemption. Redemptions occurring on any month-end which is not a calendar quarter-end, require written notice of redemption that must be received by the General Partner at least 15 calendar days in advance of such redemption. Prior to July 31, 2002, redemptions could be made only as of the last business day of any quarter upon five business days advance notice. Redemption of units in $1,000 increments and full redemption of all units are made at 100% of the net asset value per unit effective as of the last business day of any month, as defined in the Limited Partnership Agreement. Partial redemptions of units which would reduce the net asset value of a Limited Partner’s unredeemed units to less than the minimum investment then required of new Limited Partners or such Limited Partner’s initial investment, whichever is less, will be honored only to the extent of such limitation.

4. Income Taxes

The Partnership has not made any provisions for U.S. federal, state and local income taxes since the partners are responsible for reporting income or loss based upon their respective share of revenue and expense.

5. Related Party Transactions

The General Partner, due to its relationship with its affiliates and certain other parties, may enter into certain related party transactions. Bellwether Partners LLC (“BPL”), a Delaware limited liability company and an affiliate of the General Partner, is the Partnership’s only foreign exchange forward counterparty and does not charge commissions for transacting the Partnership’s foreign exchange contracts. In addition, BPL does not charge commissions for transacting the Partnership’s commodity forward contracts. The Partnership typically has on deposit with BPL, as collateral for forward contracts, approximately 4% of the Partnership’s net assets. At September 30, 2003 and December 31, 2002, the amounts on deposit with BPL were $2,081,861 (including $249,700 in unrealized gains) and $2,121,666 (including $193,849 in unrealized gains). The Partnership earned interest income of $4,464 and $13,879 for the three and nine months ended September 30, 2003 and $6,780 and $17,529 for the three and nine months ended September 30, 2002, from deposits of collateral with BPL.

TIC receives incentive and management fees as compensation for acting as trading advisor (Note 2).

6. Risk Management

Market Risk Management

The Partnership maintains positions in derivative instruments that trade both on exchanges and “over-the-counter” (“OTC”). The Partnership is subject to credit risk and changes in market value associated with the financial instruments that are traded. In conjunction with proprietary and other customer accounts, TIC takes an active role in managing the Partnership’s market and counterparty risks and has established formal internal control procedures that are reviewed on an ongoing basis.

TIC has developed a set of guidelines and policies that are designed to maintain risk at levels, which are appropriate and necessary to achieve targeted rates of return. These guidelines and policies include quantitative and qualitative criteria for individual risk factors as well as for aggregate risk. TIC’s Risk Management Department, in conjunction with various senior personnel from different disciplines throughout TIC and its affiliates, regularly assesses and evaluates the Partnership’s potential exposures to market risk based on analyses performed by the department.

TIC evaluates the positions taken by the Partnership in various instruments and markets globally and assesses the market risk associated with those positions. TIC uses a statistical technique known as Value at Risk (“VaR”) to assist in measuring market risk. The VaR model is a proprietary system and is one of several tools used to monitor and review the Partnership’s trading portfolios. The VaR model projects potential losses based on a historical simulation methodology which uses two quarters of historical data, a one day holding period, and a 99% confidence level.

As a writer of options, the Partnership receives a premium upon initial settlement and then bears the risk of changes in the price of the financial instrument underlying the option. Swaps, forward rate agreements, currency forwards and OTC foreign currency options are traded in unregulated markets.

Credit Risk Management

Derivative instruments are bilateral agreements that result in credit exposure between counterparties. Exchange traded derivatives settle through clearing houses backed by multiple members and present relatively low credit risk. OTC derivatives are settled with individual counterparties and, therefore, present potential credit risk exposure. TIC attempts to minimize exposure to trading counterparties and brokers through the use of bilateral collateral agreements (“Collateral Agreements”) with OTC derivative counterparties and through formal credit policies and monitoring procedures. TIC has a Credit Committee, comprised of senior managers from different disciplines throughout TIC and its affiliates, that meets regularly to analyze the credit risks associated with the Partnership’s counterparties, intermediaries and service providers. A significant portion of the Partnership’s positions, including cash and due from brokers, are invested with or held at top tier banks and securities dealers.

TIC establishes counterparty exposure limits and specifically designates which product types are approved for trading. TIC attempts to reduce the credit risk of the Partnership by establishing stringent credit terms in its legal trade documentation (i.e., ISDA agreements, master netting agreements, etc.) with counterparties. In addition, TIC monitors exposure levels and actively moves collateral with counterparties to reduce exposure.

Futures and forwards are typically liquidated by entering into offsetting contracts with the same counterparty. Swaps and forward rate agreements are either liquidated or held to maturity. For these instruments, the unrealized gain or loss, rather than the contract or notional amounts, represents the present value of future net cash requirements.

Notwithstanding the risk monitoring and credit review performed by TIC with respect to its counterparties, there is always a risk of non-performance.

Generally, financial contracts can be closed out at TIC’s discretion. An illiquid or closed market, however, could prevent the close-out of positions.

7. Derivative Contracts

The Partnership has Collateral Agreements with its counterparties whereby the Partnership obtains and is required to pledge collateral. The Partnership monitors the value of its derivative transactions on a daily basis and will obtain or pull back excess collateral when appropriate. As of September 30, 2003, the Partnership pledged $1,292,000 of cash collateral and no cash collateral had been received. As of December 31, 2002, the Partnership had pledged $10,000 of cash collateral and no cash collateral had been received. The Partnership records cash collateral posted in due from brokers.

8. Financial Highlights

The following represents financial highlights of the Partnership for the three and nine months ended September 30, 2003 and 2002:

	Three Months Ended September 30, 2003			Nine Months Ended September 30, 2003			Three Months Ended September 30, 2002			Nine Months Ended September 30, 2002
Per unit operating performance:
Net asset value per unit, beginning of the period	$	10,881.56		$	10,834.75		$	10,523.89		$	8,928.90
Income from investment operations:
Net investment loss		(189.69	)		(291.66	)		(53.97	)		(332.29	)
Net realized and unrealized gain (loss)		1,134.34			1,283.12			(138.88	)		1,734.43

Total from investment operations		944.65			991.46			(192.85	)		1,402.14

Net asset value per unit, September 30, 2003	$	11,826.21		$	11,826.21		$	10,331.04		$	10,331.04

Total return:
Total return before incentive fee		9.81	%		10.34	%		(1.83	) %		17.92	%
Incentive fee		(1.13	)%		(1.19	)%		0.00	%		(2.22	)%

Total return after incentive fee		8.68	%		9.15	%		(1.83	)%		15.70	%

Ratios to average net assets:
Net investment loss before incentive fee		(0.58	)%		(1.64	)%		(0.52	)%		(1.44	)%
Incentive fee		(1.13	)%		(1.19	)%		0.00	%		(1.97	)%

Net investment loss after incentive fee		(1.71	)%		(2.83	)%		(0.52	)%		(3.41	)%

Expenses before incentive fee		0.84	%		2.49	%		0.97	%		2.74	%
Incentive fee		1.13	%		1.19	%		0.00	%		1.97	%

Total expenses and incentive fee		1.97	%		3.68	%		0.97	%		4.71	%

The per unit operating performance and ratios are computed based upon the average units outstanding and average net assets for the Limited Partner interests (excluding TIC 401(K) plan net assets, units and related income and expenses—see Note 2) for the three and nine months ended September 30, 2003 and September 30, 2002. Total return is calculated as the change in the net asset value of the Limited Partner interests for the three and nine months ended September 30, 2003 and September 30, 2002. The total return and ratios calculated for an individual Limited Partner may vary based on the timing of capital transactions; the total return and ratios for the TIC 401(k) Plan will vary due to the timing of capital transactions and due to the fact that it is not charged management or incentive fees (see Note 2). The average net assets for the Limited Partner interests used in the above ratios is calculated by adding any redemptions payable effective at the end of the period to the partners’ capital for such period.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the financial statements of the Partnership and related notes thereto.

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Management believes that the estimates utilized in preparing its financial statements are reasonable and prudent; however, actual results could differ from these estimates. For a description of critical accounting policies see Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Partnership’s Form 10-K for the year ended December 31, 2002.

OVERVIEW AND BUSINESS

The Partnership commenced operations on July 2, 1990. Following the closing of the initial offering period, the Partnership had 37 Limited Partners who subscribed for 421 units of Limited Partnership Interest (“L.P. Units”) for $421,000. In addition, the General Partner purchased 400 units of General Partnership Interest (“G.P. Units” and collectively with L.P. Units, “Units”) for $400,000. From inception through October 1, 2003, the Partnership received total Limited Partner subscriptions and contributions of $59,175,157 and had total withdrawals (inclusive of trading gains) of $41,569,467. In addition, the General Partner contributed $1,900,000 since inception. The General Partner redeemed $2,000,000 (inclusive of trading gains) on September 30, 1994 and $1,400,000 (inclusive of trading gains) on December 31, 1996. The General Partner’s equity in the Partnership as of October 1, 2003 was $2,324,797 representing approximately 4% of the Partnership’s equity. At October 1, 2003, the Partnership had a total of 150 Limited Partners.

As specified in its Limited Partnership Agreement, the Partnership may accept investments from certain employee benefit plans of affiliates to the extent that such investments do not exceed 25% of the aggregate value of outstanding Units, excluding Units held by the General Partner, TIC, and certain of their affiliates. On August 1, 1995, the Partnership accepted an investment of $99,306 from the Tudor Investment Corporation 401(k) Savings and Profit-Sharing Plan (the “TIC 401(k) Plan”), a qualified plan organized for the benefit of employees of TIC and certain of its affiliates. The Partnership has received TIC 401(k) Plan contributions in the aggregate amount from inception through October 1, 2003 of $5,265,729. The TIC 401(k) Plan’s equity in the Partnership as of October 1, 2003 was $10,925,911 representing approximately 19.39 % of the Partnership’s equity or approximately 21.46 % excluding Units held by the General Partner, TIC and certain of their affiliates. TIC has waived its right to receive management and incentive fees attributable to Units held by the TIC 401(k) Plan. The number of L.P. Units held by the TIC 401(k) Plan will be restated as necessary to equate the per Unit value of the TIC 401(k) Plan’s capital account with the Partnership’s per Unit value. Furthermore, Bellwether Partners LLC (“BPL”) does not charge commissions for transacting the Partnership’s foreign exchange spot and forward and commodity forward contracts.

CURRENT MARKET ENVIRONMENT

The Partnership’s trading results for the quarter ended September 30, 2003 were positive across a range of markets and instruments. The Partnership benefited from positions held in currencies and fixed income as the US dollar weakened against several countries, while long term interest rates in Japan reached new highs. The Partnership also benefited from strategies in the European equity market as equity indices exhibited a sharp decline during the quarter.

RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003 AS COMPARED TO THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002

The Partnership reported a net increase in net assets resulting from operations of $4,666,431 and $5,151,495 for the three and nine months ended September 30, 2003 compared to a net increase (decrease) in net assets resulting from operations of $(760,407) and $5,889,605 for the three and nine months ended September 30, 2002.

The following table compares Net Asset Value per Unit for the three and nine months ended September 30, 2003 and 2002:

	Net Asset Value per Unit		Change in Net Asset Value Per Unit
	Net Asset Value per Unit		Three Months Ended September 30					Nine Months Ended September 30
September 30, 2003	$	11,826.21	$	944.65		8.68	%	$	991.46	9.15	%
September 30, 2002	$	10,331.04	$	(192.85	)	(1.83	)%	$	1,402.14	15.70	%

INVESTMENT INCOME

Interest income for the three and nine months ended September 30, 2003 was $136,473 and $438,211 compared to the three and nine months ended September 30, 2002 of $189,599 and $507,309. The Partnership earns interest income on cash and cash equivalents maintained with banks or in trading accounts held with clearing brokers and counterparties and used by the Partnership as collateral to engage in futures, option and forward contracts and other commodity interest contracts. The Partnership’s interest income will fluctuate with its levels of collateral pledged with counterparties as well as changes in overall interest rates.

INVESTMENT EXPENSE

Interest expense for the three and nine months ended September 30, 2003 was $10,279 and $23,840 compared to the three and nine months ended September 30, 2002 of $3,471 and $10,733. The Partnership’s interest expense will fluctuate with its levels of collateral pledged by counterparties.

Brokerage commissions expense for the three and nine months ended September 30, 2003 was $88,215 and $284,844 compared to the three and nine months ended September 30, 2002 of $75,480 and $254,882. These expenses represent all brokerage commissions, exchange, National Futures Association and other fees incurred in connection with the execution and clearing of commodity interest trades and will vary based on the Partnership’s trading activity during the period. The General Partner anticipates that the Partnership will normally pay approximately 1% of its average Net Assets in brokerage commissions and other transaction costs and charges annually.

OPERATING EXPENSES

Management fees for the three and nine months ended September 30, 2003 were $218,074 and $626,512 compared to the three and nine months ended September 30, 2002 of $172,607 and $479,255. Because management fees are calculated as a percentage of the Partnership’s net assets, the increase in fees of approximately 26% and 31% was due to the overall increase in assets under management of 25% and 31%.

Incentive fees for the three and nine months ended September 30, 2003 were $482,958 and $494,538 compared to the three and nine months ended September 30, 2002 of $0 and $621,857. Incentive fees will fluctuate based on the amount, if any, of Net Trading Profits earned by the Partnership.

Professional fees and other expenses for the three and nine months ended September 30, 2003 were $75,879 and $196,032 compared to the three and nine months ended September 30, 2002 of $121,398 and $213,513. Professional fees and other expenses remained relatively stable for the three and nine months ended September 30, 2003 as compared to 2002.

NET REALIZED AND UNREALIZED GAINS (LOSSES) ON TRADING ACTIVITIES

Net realized and unrealized trading gains and losses are recorded in the statements of operations. The following table summarizes the components (in thousands) of net realized and unrealized gains and losses, net of brokerage commissions, for the three and nine months ended September 30, 2003 and 2002:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2003			2002			2003			2002
Exchange traded :
Interest rate futures and options	$	2,509		$	(927	)	$	3,272		$	1,635
Foreign exchange futures		142			(3	)		190			159
Commodity futures and options		123			—			198			—
Equity index futures		663			(575	)		(676	)		992
Over-the-counter contracts:
Foreign exchange forwards and options		1,542			793			3,597			4,202
Commodity swaps		(30	)		62			(335	)		33
Equity index swaps		(93	)		—			(335	)		(334	)
Forward rate agreements		—			—			(16	)		—
Interest rate swaps		—			150			(35	)		150
Non-financial derivative instruments		461			(152	)		194			(129	)

Total	$	5,317		$	(652	)	$	6,054		$	6,708

As the Partnership is a speculative trader in the commodities markets, current period results are not comparable to prior period’s results. The following table illustrates the Partnership’s net realized and unrealized gains and losses on trading activities as a percentage of average Net Assets, brokerage commissions and fees as a percentage of average Net Assets, and incentive fees as a percentage of net realized and unrealized gains and losses on trading activities:

	Three Months Ended,				Nine Months Ended,
	September 30, 2003		September 30, 2002		September 30, 2003		September 30, 2002
Net realized and unrealized gains (losses) on trading activities as a percentage of average Net Assets	10.2	%	(1.3	)%	12.6	%	18.0	%
Brokerage commissions and fees as a percentage of average Net Assets	0.2	%	0.2	%	0.6	%	0.7	%
Incentive fees as a percentage of net realized and unrealized gains on trading activities	8.9	%	0.0	%	7.8	%	8.9	%

Inflation is not expected to be a major factor in the Partnership’s operations, except that traditionally the commodities markets have tended to be more active during inflationary periods. Since the commencement of the Partnership’s trading operations in July 1990, inflation has not been a major factor in the Partnership’s operations.

LIQUIDITY

The Partnership’s assets are deposited and maintained with banks or in trading accounts with clearing brokers and counterparties. These assets are used by the Partnership as margin and collateral to engage in derivative instruments trading. Since the Partnership’s sole purpose is to trade in derivative instruments, it is anticipated that the Partnership will continue to maintain substantial liquid assets for margin and collateral purposes.

Cash and cash equivalents are part of the Partnership’s inventory. Cash and cash equivalents of $49,335,264 and $45,498,833 represented approximately 85% and 93% of the Partnership’s assets as of September 30, 2003 and December 31, 2002. The cash and cash equivalents satisfy the Partnership’s need for cash on both a short term and long term basis.

Since futures trading generates a significant percentage of the Partnership’s income, any restriction or limit on that trading may render the Partnership’s investment in futures contracts illiquid. Most commodity exchanges limit fluctuations in certain commodity contract prices during a single day by regulations referred to as a “daily price fluctuation limit” or “daily limits”. Pursuant to such regulations, during a single trading day, no trade may be executed at a price beyond the daily limits. If the price for a contract or a particular commodity has increased or decreased by an amount equal to the “daily limit,” positions in such contracts can neither be taken, nor liquidated unless traders are willing to effect trades at or within the limit. Commodity interest contract prices have occasionally moved the daily limit for several consecutive days with little or no trading. Such market conditions could prevent the Partnership from promptly liquidating its commodity positions.

CAPITAL RESOURCES

The Partnership does not have, nor does it expect to have, any fixed assets. Redemptions and additional sales of Units in the future will impact the amount of funds available for investment in commodity interest contracts in subsequent periods. As the amount of capital changes, the size of the positions taken by the Partnership is adjusted.

The Partnership is currently open to new subscriptions and contributions, which can be made quarterly. Periodically, the Partnership opens up subscriptions and contributions on a monthly basis. Such subscriptions and contributions are limited to employees of TIC and its principals or its affiliates and certain employee benefit plans, including, but not limited to, the TIC 401(k) Plan.

OFF-BALANCE SHEET RISK

In the normal course of business, the Partnership is a party to a variety of off-balance sheet financial instruments in connection with its trading of derivative instruments. For derivative instruments, the unrealized gain or loss, rather than the contract notional amounts, represents the approximate future cash requirements.

NEW ACCOUNTING PRONOUNCEMENT

On May 15, 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150, Accounting for Certain Instruments with Characteristics of both Liabilities and Equity (“SFAS 150”). This Statement establishes standards for classifying and measuring as liabilities certain financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity. SFAS 150 requires that financial instruments that are issued in the form of shares that are mandatorily redeemable on a fixed or determinable date or upon an event certain to occur be classified as liabilities. For SEC registrants deemed “non-public” entities under SFAS 150, SFAS 150 is effective for fiscal periods beginning after December 15, 2003. The Partnership will adopt SFAS 150 on January 1, 2004. As a result of adopting the new standard, the Partnership will reclassify those Partner Units that are redeemable upon

an event certain (e.g., the death of the Partner) to liabilities from equity with subsequent returns on such units reflected on the statement of operations. Adoption of SFAS 150 will affect the presentation of the Partnership’s financial position and ratios to average net assets as a result of the reclassification, but it will have no impact on the value of Partner Units.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Management

TIC evaluates the positions taken by traders in various instruments and markets globally and assesses the market risk associated with those positions. TIC uses a statistical technique known as Value at Risk (“VaR”) to assist in measuring market risk. The VaR model is a proprietary system, and is one of several tools used to monitor and review the Partnership’s trading portfolios. The VaR model projects potential losses based on a historical simulation methodology which uses two quarters of historical data, a one day holding period, and a 99% confidence level.

The following table illustrates the VaR for each component of market risk as of September 30, 2003 and December 31, 2002. The dollar values represent the VaR at the 99% confidence level.

Risk Factors	September 30, 2003			December 31, 2002
Interest rate derivatives	$	367,352		$	152,864
Foreign exchange derivatives		849,956			332,771
Equity index derivatives		668,549			327,531
Non-financial derivative instruments		673,085			—
Correlation offset⁽¹⁾		(1,828,942	)		(472,865	)

Aggregate VaR	$	730,000		$	340,301

⁽¹⁾

The correlation offset equals the difference between Aggregate VaR and the sum of the VaRs for the four risk factors . This offset arises due to the correlation that exists in the individual items being aggregated.

The Partnership is an active trader and the instruments and investments utilized by the Partnership change frequently. As the objective of the Partnership is to generate appreciation of its assets through speculative trading of derivatives, the risk taken in interest rates, foreign exchange rates and equity prices will vary dependent on the strategies utilized by the Partnership as well as current economic conditions and global events.

The following table illustrates the Partnership’s high, low and average daily VaR during the nine and twelve months ended September 30, 2003 and December 31, 2002 for each component of market risk noted above:

	September 30, 2003									December 31, 2002
Risk Factors	High⁽²⁾			Low⁽²⁾			Average			High⁽²⁾			Low⁽²⁾			Average
Interest rate derivatives	$	492,705		$	114,740		$	177,001		$	1,051,417		$	65,021		$	303,459
Foreign exchange derivatives		734,244			114,123			275,066			1,424,552			203,257			500,126
Equity index derivatives		860,744			165,731			282,908			643,822			116,945			173,499
Non-financial derivative instruments		315,690			54,717			160,535			173,062			77,579			68,328
Correlation offset⁽¹⁾		(565,383	)		(288,311	)		(252,510	)		(1,770,951	)		(333,043	)		(411,412	)

Aggregate VaR	$	1,838,000		$	161,000		$	643,000		$	1,521,902		$	129,759		$	634,000

⁽¹⁾

⁽²⁾

The balances shown for each component of market risk represent their daily VARs on the day that the Partnership experienced its highest and lowest daily VAR during the period.

At September 30, 2003, the Partnership’s primary market exposure was to foreign exchange, equity index, and non-financial derivatives.

Changes in interest rates directly affect the price of interest rate futures and may, indirectly, affect the price of foreign exchange futures and equity index futures. At September 30, 2003 the Partnership’s interest rate exposure was primarily to interest rate fluctuations in the United States and other G-7 countries.

The Partnership’s foreign exchange contract exposure is a result of fluctuations in exchange rates. Exchange rates fluctuate due to many factors including changes in interest rates, rates of inflation and government policies and programs.

The Partnership’s equity index exposure was primarily attributable to equity price risk in the United States and other G-7 countries. Stock index futures traded by the Partnership are principally limited to futures on broad based equity indices.

The Partnership’s exposure in non-financial derivative instruments was primarily attributable to trading in metals and grains.

In addition to exchange traded instruments, the Partnership is exposed to various OTC derivative instruments including swaps and forward contracts. In addition to having price risk that may be similar to exchange traded instruments, OTC instruments may result in the Partnership having credit risk associated with its OTC contract counterparties.

Cash and Due from Brokers balances are held principally at U.S. banks, US securities dealers, and certain international financial institutions.

Credit Risk Management

Notwithstanding the risk monitoring and credit review performed by TIC with respect to its counterparties, there is always a risk of non-performance.

Generally, financial contracts can be closed out at TIC’s discretion. An illiquid or closed market, however, could prevent the close-out of positions.

ITEM 4. CONTROLS AND PROCEDURES

As of September 30, 2003, an evaluation was performed under the supervision and with the participation of the Partnership’s management, including the President and Chief Executive Officer and the Chief Financial Officer of the General Partner of the Partnership, of the effectiveness of the design and operation of the Partnership’s disclosure controls and procedures. Based on that evaluation, the Partnership’s management, including the President and Chief Executive Officer and the Chief Financial Officer of the General Partner of the Partnership, concluded that the Partnership’s disclosure controls and procedures were effective as of September 30, 2003. There have been no significant changes in the Partnership’s internal controls or in other factors that could significantly affect internal controls subsequent to September 30, 2003.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

The Partnership initially registered 10,000 Units of Limited Partnership Interests pursuant to a registration statement (Commission file number 33-33982) that was declared effective on September 22, 1990. The Partnership registered an additional 10,000 Units of Limited Partnership Interests on September 9, 1998 (Commission file number 333-52543). Of the 20,000 Units that have been registered, 13,999 Units having an aggregate value of $59,175,157 have been sold through October 1, 2003.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

The Partnership has included in this Form 10-Q filing, and from time to time its management may make, statements which may constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not historical facts but instead represent only the Partnership’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the Partnership’s or its management’s control. Statements preceded by, followed by, or that include the words “expect,” “will,” “may,” “could,” “intend,” “anticipate,” “believe,” and “should”, involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or those of the industry in which the Partnership operates, to be materially different from any expected future results, performance or achievements expressed or implied in these forward-looking statements. It is possible that actual results may differ, possibly materially, from the anticipated results indicated in these forward-looking statements. Important factors that could cause actual results to differ from those in the Partnership’s specific forward-looking statements include:

•

decline in general economic conditions;

•

decline in liquidity in global markets generally or certain sectors and instruments within such markets;

•

material changes in government regulations relating to contracts, instruments, or participants in various markets in which the Partnership is active;

•

reduced availability of credit and other forms of leverage from counterparties, banks, and dealers in various markets in which the Partnership is active;

•

increased volatility in the capital markets; and

•

default by counterparties.

Additional information regarding these and other important factors that could cause actual results to differ from those in the Partnership’s forward-looking statements is contained in the Partnership’s Form 10-K for the fiscal year ended December 31, 2002. The Partnership hereby incorporates by reference those risk factors into this Form 10-Q. Other additional information regarding important factors that cause results to differ from those in the Partnership’s forward looking statements are contained in the Partnership’s periodic filings with the Securities & Exchange Commission.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)

Exhibits


31.1		Certification Pursuant to Exchange Act Rules 13A-15(e) and 15D-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification Pursuant to Exchange Act Rules 13A-15(e) and 15D-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification 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

The Partnership did not file any reports on Form 8-K during the three months ended September 30, 2003.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TUDOR FUND FOR EMPLOYEES L.P.

By:		Second Management LLC, General Partner

By:		/s/ MARK F. DALTON

		Mark F. Dalton, President and Chief Executive Officer of the General Partner


By:		/s/ JOHN R. TORELL

		John R. Torell, Chief Financial Officer of the General Partner

November 14, 2003

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TUDOR FUND FOR EMPLOYEES LP 10-Q