Don't know the correct sub board to place this thread. Looking for some advice regarding selling or leasing automated trading systems. Currently I have a black box system which I lease with a monthly lease to a few clients. I simply provide the systems code (encrypted) and they use 3rd party automated trading software to trade the systems. My first question is regarding the legislation with automated trading systems in the UK. I have an extensive lease agreement terms and conditions and aim to fall under the category of software provider. However, does leasing automated trading systems in the UK require any registration to FSA? I never touch any clients account and they often trade systems on their own PC. Second question is regarding hosting system on 3rd party severs near the CME. Some clients are not so tech savvy and often have full time Jobs so they don't want to worry about turning systems on, hardware and software failure etc. Hence, I now allow hosting on servers where we ensure systems are working correctly with 3rd party automated trading software. Clients have full admin rights to server and are owners whilst they lease the systems. The issue with server hosting is that technically they have their broker connected to 3rd party trading software. E.g for Interactive Brokers accounts this is loaded onto the server using IB Gateway and then we automate the login via software which encrypts the password (so we never have access to the password). So what is legality with server hosting. Again our extensive lease agreement defines us as software technical support. We only login to the server when our monitoring tools inform us of error. Any advice regarding legality issues. Thanks.
I can't speak for UK laws, however in the USA with regard to providing SAS and coordinating co-location facilities, you don't have any regulatory requirement.
Unless of course you've created an algo similar to Navinder Sarao's and your clients happen to be members of the CME who are bound to an agreement stating that it is illegal to "spoof" using software methods. Then you may be found by the Feds to be culpable and then go to jail just like Navinder.
No this is not the situation. The strategies are all fairly normal and definitely no shady stuff like spoofing. Clients are all non-professionals. Therefore, i presume in my situation providing automated trading systems requires no regulation and aided clients with software/technical support at a co-location facility also requires no regulation.