Money management under SEC

Discussion in 'Risk Management' started by ChrisM, Jul 8, 2003.

  1. ChrisM


    While I`ve been successfully trade stocks and options for some time, now I have people who want me to trade their own accounts.
    While I am currently working on SEC webpage I would like to hear from traders what certificates do I need to manage Other People`s Money ?
    Are there any exemptions like in a case of trading futures ?

    Any opinions greatly appreciated.
  2. I haven't check on it for a long time, but there used to be an exemption for trading client futures money... check with CFTC and or NFA.
  3. ChrisM


    gnome, actually I do it in futures trading area and if you provide service up to 15 customers and 200K you don`t have to register.
    But for stocks and options you act under SEC and regulations might be different.
  4. There is an exemption under '40 Act similar to CFTC. That is,
    1. LESS THAN 15 clients in past 12 months (no limit on $$$)
    2. Do not "hold youself out" to public as being in money management business... this is sticky compliance
  5. For equity management you don't need to register with the SEC if it's less then 25 million assets andless then 99 investors...HOWEVER ( a lot of people miss this point)...that does not circumvent the STATE you trade in to have you register...some states ( i think Texas) require you to register with hem and have proper licenses....The Series 65 is the Registered investment Advisor licenses...You can also take the series 66 which is a combination of the 65 and 63 ( which blueskies you in other states....If you are trading a small amount i wouldn't;t get's time consuming and expensive...Good luck
  6. ChrisM



    Thanks for this very much. How about if you want incorporate business doing such services ?
    Do papers would kill you ? :)
  7. I would use an attorney...its time consuming and requires a lot of disclosures ect....I set up a ria once using a DC will be around 25k when all is said and should also consider the right back office software to keep track of the portfolio...there's a lot of vendors out there so do your homework...but get a will save you sooo much time
  8. ChrisM


    Thank you again.
    Looks like at certain level (below few hundred K) it is better to stay privately as long as it is legal.

  9. absolutely...just make sure you have the accoutning down

    good luck
  10. ChrisM


    This (acct.) must meet any SEC requirements ?
    #10     Jul 8, 2003