About FSA (UK) authorization for money management

Hello, I live in the UK and was wondering if anybody knows whether there is any way to trade other peoples Forex accounts without the need to be authorized by FSA. FSA would cost about £2000 and more, and take a bit time to get... so not something easy to get.
- Can I sell signals?
- Can I manage other peoples accounts and take profits?
- Maybe "borrow" clients money and trade own account and give him profits?
... any ideas?

Any way to do it legally without need to register with FSA?

Is fsa is so poor they need your 2000 bucks? i wonder this very often

Ye, this is amazing how big these fees are. They should be *helping* the community to make these things easy and get people to authorized easily. But now definitely this kind fee system puts many off... Why does goverment need to take advantage of people and make big profits? I understand if it was a private company... they would put price as high as possible, but this is about helping people to be legal.

Me to be a simple trader and trade like 5 peoples money would not need to cost many grands...cannot be so big task to read couple of lines what I do and see my bank statements..

Reasonable price would be like £200 for very small businesses like me.

If I was doing my business big and online asking hundreds of people to join, then of course I am happy to pay big fees and register and everything... But why do I need to register to trade for my relative? Does not make any sense to me.

btw. I am not agains law, but I am against making it so difficult/expensive to be be legal. Goverments should not be making money on these kind of things. They are doing very good job taking care that financial companies are doing righ things. But I think the size of the company should be considered when making these fees.

My understanding is that you should be OK trading other people's money under a power of attorney agreement so long as you dont have too many clients, or too much money under management. The FSA probably wont be prepared to put numbers on that, but I do know people with a few dozen clients and a few hundred thousand under management who dont seam to have any problems at all.

Most brokers provide PAMM facilities precisely for these sorts of situations and there's no legal requirement for registration.

Theoretically you wont be allowed to actively solicit for clients (again the FSA wont specify what they mean by that) I've known genuine people with a website that publishes monthly results fall foul of the FSA, and I've known people running blatent ponzi schemes soliciting cash at hotel presentations without the FSA being remotely concerned.

If clients are family members, friends or friends of friends you'll be OK, again it comes down to solicitation, the closer the client is to you, the less problems you'll have.

I suppose the fee's are set at a level to discourage those who arent really serious. If where £200 there would be a flood of applications from mainly unsuitable applicants. The application fee's tax deductable anyway so its irrelevant what it is. If you dont pay the 2K to the FSA, you'll only end up paying it to the inland revenue as tax on your profits.

Thank you very much. This is one of the best answers I have got so far!

The problem is though, that if I ask this from FSA, .... not sure if they are even themselves sure what to say .

But I have a feeling that your advice is right. I also hope so .

"I do know people with a few dozen clients and a few hundred thousand under management who dont seam to have any problems at all."

But, have these people been in contact somehow with FSA so that FSA knows what they are doing? And FSA still after that is not going against them? Because of course if FSA does not know about them, they dont do anything .

Your aswers gives me hope ... . I feel already better .

[quote=jpk;4041829]Thank you very much. This is one of the best answers I have got so far!

The problem is though, that if I ask this from FSA, .... not sure if they are even themselves sure what to say .

But I have a feeling that your advice is right. I also hope so .

"I do know people with a few dozen clients and a few hundred thousand under management who dont seam to have any problems at all."

But, have these people been in contact somehow with FSA so that FSA knows what they are doing? And FSA still after that is not going against them? Because of course if FSA does not know about them, they dont do anythin

where you been locked up !

I called the FSA regarding this matter earlier this year. Chocolate fireguard came to mind..... I specified my intentions and they said they would mail me some information.

When I asked directly if I needed FSA registration, they said something along the lines of "we are unable to confirm whether or not you need to be registered or not, that is for you to decide"

So my suggestion is go along with what you are doing, be open about it, document everything and use a reputable accountant at the end of the year.

Attempting to get any sort of an unequivocal answer re registration from the FSA is an exercise in futility.
Their Perimeter Guidance section seem to be of the general idea that ALL traders who trade other peoples funds, whether they be family, friends, or strangers; solicited or unsolicited; promoted or word of mouth, should be registered.
However, when you attempt to speak about your specific circumstances, they immediately become evasive.
Bottom line is that the FSA brackets one-man-band traders, who trade a $50k account for a friend, with gigantic Mayfair hedge funds who move $100m around the market. Bloody ridiculous!

keep in mind that the regulation is there to protect people overall.

if your trading other ppls money i'd be more concerned about transparency. better to trade their funds on their account and have them pay you your fees end of every month. so if the unintended consequences arise, finger pointing and doubt is less.

consider an offshore entity conducting the trades with offices in the uk. i dont know about the legal position, but i've read many articles mentioning hedge funds registered off shore, mayfair offices. its one way around scrutiny.

Hi
Totally agree re transparency.
The anomalous thing is that you can trade one persons $250k via their own account, but you cannot(or you'll have to downgrade to a 'weaker' platform etc) trade 3 or 4 peoples accounts totalling, say, $100k.
Most other taxation and regulation departments have banding, ie different thresholds and competencies for different complexity and sized entities. The FSA just goes one-size-fits-all.
And it doesn't.