As many of you know, the SEC is considering new rules to make what a lot of the current proprietary trading companies are doing illegal (taking deposits, paying out almost 100%, etc..), since they feel that it is really just a retail account disguised as proprietary trading. I agree with this, it really is a broker-customer relationship, not a firm-employee relationship. You are not trading firm capital, you are actually just trading firm leverage, since you are responsible for trading losses. Now, I think prop firms offer a valuable service to many traders, and I don't see any reason why it should be outlawed, BUT, there is a problem w/ the industry because many unscrupulous companies are falsely advertising it. Personally, I feel that any action taken by the SEC should be as follows: Proprietary trading shops cannot call themself proprietary trading, or advertise that they are "hiring" traders. They must advertise the service for what it is, a broker-customer type relationship (and perhaps have a new name for the type of trading) The prop shops must INFORM traders of what the risks are. Granted, currently the good ones do, but a lot of unethical ones make it seem like it's risk-free for newbie traders. They must CLEARLY tell traders that their "capital contribution" will be used to cover their trading losses and commissions. Any advertisements on job sites must clearly indicate the fact that there is no salary and there is a high degree of risk. (Currently a lot of these companies are putting up job postings just saying "competitive pay"). If the company requires a deposit from ANYBODY, they must clearly state this on the job posting. Deposits must be kept in a seperate bank account, the firm cannot combine it with it's own money, this way it will avoid the problem where traders may lose their deposits if a bad prop trading firm goes bankrupt. If the management does ANYTHING that could cause a loss of a trader's deposit, they will be criminally liable for fraud. Prop trading firms who require deposits must disclose financial statements just like a brokerage has to. There's no reason traders should have to be exposed to bad companies with poor financials that may cause interruptions with their trading or a loss of their deposit. The firm must give the trader an all-inclusive list of charges, fees, etc.. that clearly tells the trader what they will be paying, just like a brokerage would. They cannot charge for anything not on the list. I think the major problem now with prop shops is the deception caused by some of them to get inexperienced traders generating commissions. As in any industry, there's good companies and bad ones, but the bad ones in this industry are causing real harm to the people who are duped into thinking that they're accepting a typical job under a typical employer-employee setup. What are your opinions on this?