Depending on how much money and how many clients you will manage is what determines whether or not you need to become licensed. Through FXCM (and others I'm sure), you can have clients create an account in their own name and keep the money under their name. They then sign a Limited Power of Attorney form for you. This allows you to trade their account at your discretion (whether automated or directed). It does NOT however give you any ability to deposit/withdraw (only trade). And on their end, it remains a "read-only". But this would give them full transparency in seeing what's going on and what the results are on a real-time basis, while adding additional trust with keeping their money in their name. Under this case, you can't advertise as a CTA (unless you do get it, though not necessary). It only becomes necessary to get a CTA and license up IF you manage $30m+ and/or 15+ clients (last I heard). And even then, there may be ways around it, such as creating an LLC with several clients, and having the LLC create 1 single account (consolidation). The fees that they would pay to you would be "performance fees" and classify as a Misc Deduction for taxes for you. For the clients, they will be taxed on the returns at a blended 60/40 long-term/short-term cap gains rate (minus misc expenses). You must have a separate agreement in place with clients (outside of broker) that would stipulate the terms of your agreement (fees, when paid, based on what watermarks (or however you do it), lock-ups, disclosures, etc). This would be your "client contract" and should be reviewed by a lawyer so that it would stand in court (though I know people who've created their own based on legal docs and it has held up). This is what comes to mind at the moment. Any questions or clarifications, please don't hesitate. Hope it helps!
Cable is busy chasing a Siberian Hamster in another thread. I think Manuel now resides in Arizona. http://www.youtube.com/watch?v=15TL...B8B04961&playnext=1&playnext_from=PL&index=35 The Ever Lovin It VIPER