In fact, it only applies to private investments like hedge funds. And I don't just think, I have been there and done that (Akin Gump is council). Hostile sounding to get your attention and shake some sense into the original poster. People think they can run money for a hobby, but this is extremely serious considering that you can lose everything for pulling some shit like this and no one here THINK's it applies to them, but it does.
Joetrader is spot on. You are not allowed to pay fees to anyone besides a B/D. You could, however, hire the marketer and pay them as an employee. I'm sure that there are some other ways to work it too, but I would definitely talk to your legal firm first.
My grandfather. He was consulate to China in the 80s - he also owned an import/export business. His rule of thumb for sales was 10% up to 1 million USD and 5% of anything over - I adjusted for inflation. The fee is for the booking of the business - not forward looking revenues.(obviously, the salesperson's job is done when you book the deal - they are no longer exposed.) btw - he was extremely successfull in business.
Not to beat a dead horse, but if you are referring to my post...Based on my conversations with the NFA and my compliance firm (who have 10+ years as NFA auditors), it would be permissible to pay someone not registered as an associated person (i.e. passed the Series 3) so long as they didn't hand out the DDoc or make claims, etc. Just an introduction. I just posted to see if anyone had any contrary experience.
Arb Under - My council may be conservative, but they said even if I were to flat out hire a guy to work at my firm solely for his contacts that I would have to make it a marketing position and have him do more than just call up his contacts. They even went as far as saying i should consider changing the title to CFO, etc and have him participating actively in other aspects of the business. Guess the SEC is picky when it comes to TPM's huh?! lgantt - my legal council (Akin) does not share your position in the least. But I am organized as a hedge fund and maybe the SEC's requirement are stiffer than the NFA's? At any rate, short of absconding with investor's funds, fund raising illegally is one of the worst messes you can get yourself into so I would suggest hiring a law firm that specializes in whatever type of investment fund you are running.
a hedge fund is not a broker dealer itself, yet charges fees. how is this rectified with having to be a broker-dealer to receive a fee for raising capital for same? thanks, surfer