Is it legal for unlicensed traders who reside in the USA to trade prop for a foreign company. Are foriegn companies bound by SEC rules that traders need to be licensed? Or since they are off shore, they can have traders who are not licensed and reside in America trade for them.
There's no SEC rule that traders need to be licensed. You must be licensed to be a limited partner in a firm that is Exchange registered, i.e. a typical prop firm. But one could set up an account at let's say IB with someone as a partner and the trader(s) certainly don't need a license to trade U.S. securities. Being a trader or even a prop trader is much different than being a de facto exchange member.
Pabst, SO if my traders trade for an offshore LLC that is not registered as anything, how would they get paid, by regular 1099 ?