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Are there any Hedge Fund owners here

  • #1
  • First Post: Dec 25, 2006 9:38am Dec 25, 2006 9:38am
Hey guys


I was wondering is there anyone here that either owns a hedge fund, or knows about the hedge fund business specifically with Forex

My and a couple other associates had a couple of questions I would like to get answered if you dont mind

They are very simple, and should only take a minute of your time

Thank you
Nothing is hard, some things just take more time and discipline.
  • #2
  • Dec 25, 2006 9:46am Dec 25, 2006 9:46am
what are your questions? i may be able to help you
Relax and be happy.
  • #3
  • Dec 25, 2006 10:09am Dec 25, 2006 10:09am
Well here they are



Do you need any type of personal liscenses to trade for your hedge fund..other than the business ones


What happens if you just want to trade family and friends money (so you are not looking for outside investers) and just want to keep it legal..do i need a liscense or can I just go through my broker and use therer PAMM software or something?


I gueuss what I want to do right now is just be able to legally trade for my family and friends, I have a website and business cards, but I am afraid to tell any of them about it because I dont know if i have all the legal stuff set up such as business liscense, traderes liscense etc.

Is it easier to just be a personal fund manager than a hedge fund manager...or are they the same thing?


I guess my initial questions are geared to just managing personal funds...not reallly ready for a hedge fund yet. But I do wnat to have some kind of official/professional business set up for my family and friends.

Thanks
Nothing is hard, some things just take more time and discipline.
  • #4
  • Dec 25, 2006 10:33am Dec 25, 2006 10:33am
Quoting NipthePips
Do you need any type of personal liscenses to trade for your hedge fund..other than the business ones
no. investors will want to see you have a series7 and series3 (and some others), but you are not required to have these by law.


Quoting NipthePips
What happens if you just want to trade family and friends money (so you are not looking for outside investers) and just want to keep it legal..do i need a liscense or can I just go through my broker and use therer PAMM software or something?
if you want to trade just family and friends money, you dont need a hedgefund. you would more likely want a CTA for this kind of thing, its a hell of a lot less regulation. a hedgefund that trades family and friends money is way overkill.


Quoting NipthePips
I gueuss what I want to do right now is just be able to legally trade for my family and friends, I have a website and business cards, but I am afraid to tell any of them about it because I dont know if i have all the legal stuff set up such as business liscense, traderes liscense etc.
have your family open accounts with a broker who supports the ability to trade "advisor accounts". if this is for trading forex only, you dont need any license whatsoever. the regulations are very lax.

Quoting NipthePips
Is it easier to just be a personal fund manager than a hedge fund manager...or are they the same thing?
i am guessing that you mean CTA when you say "personal fund manager". this is not the same thing as hedgefund manager. hedgefunds have incredibly complex legal regulations, blue sky laws, restrictions on who can and can not invest etc etc.


hope this helps!
Relax and be happy.
  • #5
  • Dec 25, 2006 10:37am Dec 25, 2006 10:37am
Quoting merlin
no. investors will want to see you have a series7 and series3 (and some others), but you are not required to have these by law.



if you want to trade just family and friends money, you dont need a hedgefund. you would more likely want a CTA for this kind of thing, its a hell of a lot less regulation. a hedgefund that trades family and friends money is way overkill.



have your family open accounts with a broker who supports the ability to trade "advisor accounts". if this is for trading forex only, you dont need any license whatsoever. the regulations are very lax.


i am guessing that you mean CTA when you say "personal fund manager". this is not the same thing as hedgefund manager. hedgefunds have incredibly complex legal regulations, blue sky laws, restrictions on who can and can not invest etc etc.


hope this helps!

Thanks for the info!


What does CTA stand for?


And what brokers do you know allow that...I wanted to trade through EFXG, I already programmed something that keeps track and allocates all profits and income etc..so I just need a good broker and all the funds were going to be pooled together..

That is why I figured I need a business liscense and some other kind.
Nothing is hard, some things just take more time and discipline.
  • #6
  • Dec 25, 2006 10:48am Dec 25, 2006 10:48am
CTA = Commodity Trading Advisor

btw, you dont want to commingle funds as that can get complicated, there may also be some laws against it. many many brokers are setup so that your family can open their own account and you will be able to trade that account from a master account. im not sure about EFX, but ask them about it. usually brokers have systems in place to help you manage this whole operation, everything is pretty automated.
Relax and be happy.
  • #7
  • Dec 25, 2006 10:53am Dec 25, 2006 10:53am
btw, i know a lot more about hedgefunds than i do about CTA's so you will probably want to get some second opinions
Relax and be happy.
  • #8
  • Dec 25, 2006 10:55am Dec 25, 2006 10:55am
Quoting merlin
CTA = Commodity Trading Advisor

btw, you dont want to commingle funds as that can get complicated, there may also be some laws against it. many many brokers are setup so that your family can open their own account and you will be able to trade that account from a master account. im not sure about EFX, but ask them about it. usually brokers have systems in place to help you manage this whole operation, everything is pretty automated.
So being a CTA allows me to open a fund management business with a title and incorporated etc?

next all i would have to find is an attornay and an accountant to handle my taxes?

Thnx for the replies Merlin
Nothing is hard, some things just take more time and discipline.
  • #9
  • Dec 25, 2006 11:04am Dec 25, 2006 11:04am
Quoting merlin
btw, i know a lot more about hedgefunds than i do about CTA's so you will probably want to get some second opinions
Oh ok...well I know who to come to when i am thinking about opening up a hedge fund
Nothing is hard, some things just take more time and discipline.
  • #10
  • Dec 25, 2006 11:17am Dec 25, 2006 11:17am
Quoting merlin
btw, i know a lot more about hedgefunds than i do about CTA's so you will probably want to get some second opinions

How do you go about getting series3 series7 etc type liscenses?
Nothing is hard, some things just take more time and discipline.
  • #11
  • Dec 25, 2006 12:08pm Dec 25, 2006 12:08pm
merlin & NipthePips
Thank you for this interesting topic
Prof Herman
  • #12
  • Edited 12:46pm Dec 25, 2006 12:36pm | Edited 12:46pm
Quoting merlin
no. investors will want to see you have a series7 and series3 (and some others), but you are not required to have these by law.
Merlin correct me if I'm wrong, but Series 7 is stocks.

I ran into the same situation last year when I wanted to trade people's money. I had to contact my state attorney general. The AG will have a secretary of trade that will tell you what you must pass. It's a very personable thing and you need to develop a cordial business relationship with your AG of securities. My guess is you will be required to pass a Series 6 exam.

Tom
  • #13
  • Dec 25, 2006 2:07pm Dec 25, 2006 2:07pm
Every state has different requirements but basically when you start a lot depends on how you structure the account(s).

There is a big difference between individuals setting up their own trading accounts and giving you only trading authority but no other control of their funds, and individuals sending you cash to invest.

If you are forming an investment company and getting funds from anyone other than family members, you are selling unregulated securities, get familiar with Regulation D.

Good Luck

http://www.law.uc.edu/CCL/33ActRls/regD.html
  • #14
  • Dec 25, 2006 4:27pm Dec 25, 2006 4:27pm
Quoting ubiestmea
Every state has different requirements but basically when you start a lot depends on how you structure the account(s).

There is a big difference between individuals setting up their own trading accounts and giving you only trading authority but no other control of their funds, and individuals sending you cash to invest.

If you are forming an investment company and getting funds from anyone other than family members, you are selling unregulated securities, get familiar with Regulation D.

Good Luck

http://www.law.uc.edu/CCL/33ActRls/regD.html

I am just going to go out and ask


Is there anyone here that is familiar with CTA or fund managing that doesn't mind donating a little of there time and chatting with me to answer some questions I have?

It will be greatly appreciated
Nothing is hard, some things just take more time and discipline.
  • #15
  • Dec 25, 2006 5:32pm Dec 25, 2006 5:32pm
Why don't you just call the CFTC and NFA? They are more than willing to talk to you about the requirements for registration.
  • #16
  • Dec 25, 2006 6:04pm Dec 25, 2006 6:04pm
Registration is very lax when it comes to this, but you must check with your state. You will be under the regulations that are in the state by-laws only (so far).

The Series 65 is the gold standard in the US and many states require that you be certified as a CTA. That is usually coupled with a registration with the NFA, but isn't necessary. It just looks nice to investors. All the other series are much harder, and really a waste of time since nearly all states require only the 65. You can take the 7 and the 3, I believe, but they are much harder with a high failure rate.

Never take my word for it. Look this up yourself. I am speaking from New York and Missouri, so it may be very different where you are.

Freak
  • #17
  • Dec 25, 2006 6:29pm Dec 25, 2006 6:29pm
Quoting philmcgrew
Why don't you just call the CFTC and NFA? They are more than willing to talk to you about the requirements for registration.
Because I would like more of a personal experience advice than official

But thanks
Nothing is hard, some things just take more time and discipline.
  • #18
  • Dec 25, 2006 6:54pm Dec 25, 2006 6:54pm
If its just family and friends start a small investment club, lump the funds and trade them, then once a year make the disbursments or hold and reinvest.
again FX is really pretty wide open and licenses are not yet required.

Quote:
Originally Posted by NipthePips
I gueuss what I want to do right now is just be able to legally trade for my family and friends, I have a website and business cards, but I am afraid to tell any of them about it because I dont know if i have all the legal stuff set up such as business liscense, traderes liscense etc.

have your family open accounts with a broker who supports the ability to trade "advisor accounts". if this is for trading forex only, you dont need any license whatsoever. the regulations are very lax.

As always do your due diligence, don't blindly accept the advice given on this or any other forum.

also here is a little info from the NFA CTA Requirements
Same Whore .... Different Dress
  • #19
  • Dec 25, 2006 7:06pm Dec 25, 2006 7:06pm
Quoting NipthePips
Because I would like more of a personal experience advice than official

But thanks
Good! When you're investigated just tell them your friends at the Forex Factory said it was OK.
  • #20
  • Dec 25, 2006 7:13pm Dec 25, 2006 7:13pm
Quoting philmcgrew
Good! When you're investigated just tell them your friends at the Forex Factory said it was OK.
LOL

I didnt mean it like that

of course I am going to get my official legal advice

But you cant get that personal experience touch from officials

Only people that went through it can tell you how hard/easy it is, what to expect etc

You get what I am saying

I didnt mean that offensively
Nothing is hard, some things just take more time and discipline.
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