Do I need any licensing to trade public money? | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

VennD - Any Pairs - Any Style - Any Time 741 replies

Is there any service that gives you money to trade? 7 replies

Programmer Wanted: Indicator layout changes + Licensing 1 reply

Question about licensing for Spot Forex 2 replies

Do I need any licensing to trade public money?

  • #1
  • First Post: May 7, 2006 8:24pm May 7, 2006 8:24pm
I am getting to the point where people are asking me if I will trade their money for them in spot forex. Is there any type of licensing I need to trade spot forex for other people? Any links related to this topic would be greatly appreciated.

Thanks
  • #2
  • May 7, 2006 8:38pm May 7, 2006 8:38pm
No matter what you get for replies here, this is a question for your lawyer.
honestly.
  • #3
  • May 7, 2006 8:45pm May 7, 2006 8:45pm
Quoting jimsasya
I am getting to the point where people are asking me if I will trade their money for them in spot forex. Is there any type of licensing I need to trade spot forex for other people? Any links related to this topic would be greatly appreciated.

Thanks
While you need a Series 7 if you're trading stocks & commodities for others, you don't need any special license to trade the FOREX for others. That's another beautiful thing about this market. No unnecessary regulations. Let your profits be your proof that you are a good trader.
  • #4
  • May 8, 2006 12:42am May 8, 2006 12:42am
It depends where you are working from, which country. You need to take local advice.
  • #5
  • May 8, 2006 2:16pm May 8, 2006 2:16pm
Play it safe & open accounts for other people and trade for them using their username & password and to be more safe, let them initiate a power of attorney for you so that you can have full access over their accounts....You will need to consult a lawyer for sure, this is just our little knowledge about the issue...


Thanks,

Nader
  • #6
  • May 8, 2006 2:32pm May 8, 2006 2:32pm
If you trade OPM (other people's money), the US government will classify you as a security type entity. You would then need to comply with SEC guidelines/rules.

The short answer is-do not trade OPM unless you are an extremely sophisticated trader/investor. If you still want to do it, you have got to work with an attorney and be compensated fairly for your efforts (win or lose).

Happy trading.
  • #7
  • May 8, 2006 4:03pm May 8, 2006 4:03pm
Quoting squat1962
If you trade OPM (other people's money), the US government will classify you as a security type entity. You would then need to comply with SEC guidelines/rules.

The short answer is-do not trade OPM unless you are an extremely sophisticated trader/investor. If you still want to do it, you have got to work with an attorney and be compensated fairly for your efforts (win or lose).

Happy trading.
This leads me to a question.

My brother and I plan on forming an llc in the near future and opening an account.

If I trade the llc's money as one of the principals, would I be subject to SEC guidelines/rules?

My brothers' father in law is an attorney who would set up the llc, but I don't know if he is familiar with SEC guidelines/rules.

I guess I need to find out

Jimmy
  • #8
  • May 8, 2006 5:31pm May 8, 2006 5:31pm
Quoting dangerman
This leads me to a question.

My brother and I plan on forming an llc in the near future and opening an account.

If I trade the llc's money as one of the principals, would I be subject to SEC guidelines/rules?

My brothers' father in law is an attorney who would set up the llc, but I don't know if he is familiar with SEC guidelines/rules.

I guess I need to find out

Jimmy
You do not need to follow any SEC guidelines if you're trading the FOREX only. I went to James Dick's seminar from PremiereTrade.com. While James Dick was signing my book, I asked him the exact same question. I asked him that question back in 2004. Nothing has changed. Only advice I would give is the one that a previous person posted and that is to have your clients fill out the Limited Power of Attorney form so you can trade their account. Every good broker has this for you already. All you need to do is print out the PDF, have your client sign it, and fax it back to the broker.
  • #9
  • May 8, 2006 5:48pm May 8, 2006 5:48pm
Quoting 50weeks
You do not need to follow any SEC guidelines if you're trading the FOREX only. I went to James Dick's seminar from PremiereTrade.com. While James Dick was signing my book, I asked him the exact same question. I asked him that question back in 2004. Nothing has changed. Only advice I would give is the one that a previous person posted and that is to have your clients fill out the Limited Power of Attorney form so you can trade their account. Every good broker has this for you already. All you need to do is print out the PDF, have your client sign it, and fax it back to the broker.
50weeks,

Thanks for your response! I won't really have a client though, My brother and I would be partners so to speak in the llc., but that's another great question for his father-in-law attorney. Thanks again.

I see this is your second post. WELCOME to the forum, lots of great people here, look forward to hearing from you again.

I will look more closely into the legal "mumbo jumbo" since I have read this thread, thanks for starting it jimsasya.

Jimmy
  • #10
  • May 8, 2006 8:17pm May 8, 2006 8:17pm
Quoting jimsasya
I am getting to the point where people are asking me if I will trade their money for them in spot forex. Is there any type of licensing I need to trade spot forex for other people? Any links related to this topic would be greatly appreciated.

Thanks
When you say you are going to trade OPM (other people's money), I am assuming you will atleast be the introducing broker and charge some sort of a commission on the watermark earnings as the authorized trading agent.
The PoA forms of most brokers will have a clause in them stating that the agent is supposed to be a CTA and he has to abide by the NFA regulations.
More information on this can be had at
http://www.nfa.futures.org/compliance/forex.asp

Hope this helps.
  • #11
  • Last Post: May 8, 2006 9:48pm May 8, 2006 9:48pm
There are 3 very large Retail Brokers,well chronicled here on this forum, that enable trading other peoples money easily, via the linking of accounts and software, all with a power of attorney. Two of these brokers will let you operate with solely a power of attorney. If you have the people, and they have the money, c'mon down.

The other broker, will not talk to you about letting you utilize thier platform for trading OPM, unless you have a series 3, from what I hear.
0 traders viewing now