Don't you have to have a license in USA to manage other peoples trading accounts... i.e. one of the series X tests?
- #202
- Jun 9, 2007 11:38pm Jun 9, 2007 11:38pm
- | Membership Revoked | Joined Dec 2005 | 2,298 Posts
Same Whore .... Different Dress
In order to trade, you will not need a limited power of attorney, the only time you'll need that is if you are NOT listed as an owner, i.e. the acct is registered soley in the other party's name. For instance, if you open an acct and want to have your broker execute trades at his or her will, they will need to you to sign a power of attorney form.
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Finally, about the licensing requirements. I carry a Series 7, 63, and 65 license and previously held a Series 3. The reason for having a securities license (or commodities license) is when you are soliciting the public to purchase securities (and a host of other reasons, but not to trade!). For instance, when a client calls me and asks to purchase shares of a mutual fund (or a specific stock at a certain time and price), I need to be licensed in order to transact that order. Otherwise I've just broken the law, as well as the firm I work for. But if you are calling a broker to purchase shares of a mutual fund or stock for an acct, let's say a joint acct you hold with your friend, you do not need a securities license. The person on the other end of the phone, however, does.
As I said in my previous post, once you start charging a fee, or collecting money to manage accounts, this is when licensing becomes an issue. You can probably get away with managing a couple of accounts for money unlicensed, but when you start doing it with dozens of accounts, such that it becomes significant income, you begin to arouse suspicion with the SEC/NASD/CFTC, or whatever other acronyms.
- #209
- Jun 11, 2007 9:24am Jun 11, 2007 9:24am
- | Joined Jul 2006 | Status: Inefficiency Exploitation | 138 Posts
Yeah, I tested for the Series 65, but got too lazy to actually register for the license.
As I said in my previous post, once you start charging a fee, or collecting money to manage accounts, this is when licensing becomes an issue. You can probably get away with managing a couple of accounts for money unlicensed, but when you start doing it with dozens of accounts, such that it becomes significant income, you begin to arouse suspicion with the SEC/NASD/CFTC, or whatever other acronyms.
Great response, I especially enjoy your posts on other threads.
You're right on the money in regards to fees. Also, when you're trading in return for a portion of profits, like a hedge fund manager, I'm much more ignorant of the appropriate licensing/registration requirements. And I think that when you start managing an acct in this manner the best advice is to speak with an attorney or two. I am somewhat knowledgable in regards to Commodity Trading Advisors and their registration requirements, but I'm not sure if all private/hedge fund managers need to be registered as CTAs or not.
I have experience dealing with various compliance and legal departments in the financial industry - regulation is there for a reason, and even if you can "get away with it" we should all try and be aware of the rules and abide by them. Sorry to sound like an overbearing mother, but we should be encouraging new traders to seek out and obey the regulations of their trading environment and not circumvent them when it is a matter of convenience.
To be clear, I don't think that Blue in any way encouraged anyone to break or bend any laws or rules, but I think the the point he made needs to be strengthened: while you may be able to avoid proper registration requirements, it's still unlawful and will most likely catch up to you. Bending the rules is bad business and gives the trading industry a bad name. Besides, an ounce of prevention is worth a pound of cure. Make sure you're abiding by the laws and later on you'll have much less headaches if the authorities should contact you.
Finally, do some homework with the resources you already have: your broker. Odds are, they probably have some sort of legal cousel who will be able to give you some advice on trading for another party. After all, you're paying your broker a spread/commission to execute your trades and are probably trading against them. The least they can do is help steer you in the right direction and give you some insight that is more credible than what you can find on the internet. Just a thought.
-=DAVE=-
- #216
- Jul 11, 2007 7:19am Jul 11, 2007 7:19am
- Joined Feb 2007 | Status: Stock Broker, October 1987 | 1,281 Posts
- #219
- Aug 5, 2007 5:00pm Aug 5, 2007 5:00pm
- Joined Jun 2007 | Status: Be yourself, everyone else is taken | 2,734 Posts
If anybody reading this post knows about how you pay tax on forex profits if you are based in the UK but use a US broker I would appreciate it if you could outline how it works. I am currently working full time and trade part time but aim to leave my job next year and trade full time. I have asked the inland revenue and a couple of accountants and they all say different things! Very confusing.
I have been using UK spread betting companies up until now which has been tax free but as I have become more and more profitable they have become more and more unreliable. I now need to use a 'proper' broker for my main account.
Any info would be appreciated.
Good luck
