Hello, my first post... I've been a gawker of this site every now and then and occasionally see some pretty good advise. A bit about myself, I usually trade ES; 1-5 positions overnight, 3-20 intraday. Been in the investment industry for over 7 years and own a few very small businesses, nothing to write home about. Myself and a few friends/associates in Canada are looking to form a legal structure (corp). We mainly trade ES and other major futures. The main reason is to combine the trades under one main account thru sub accounts, so our trading and capital is not commingled but the total amount of contracts are. This achieves lower costs thru our broker (looking at interactive broker right now) and we would be leasing 2 "seats" at CME group to achieve lower fees. I'm looking at CME Rule 106.H. Yes, I know that all the operating costs may be around $9K a year. We also have 2 others who are interested in joining but they are outside of Canada: Seattle in the US and London, UK. Here are my questions: 1) Is IB the best choice for a Canadian company? We don't have a lot of options and IB has the most competitive rate and have white label solutions for different types of structures. CME will grant you seats if you clear thru certain dealers, so options could be very large banks but I'm unsure if that can even be an option as a Canadian. I can be satisfied with IB at $0.50 a round trip for ES... 2) Is a better option to open an LCC in the a US state that where you don't need to pay taxes? I'm sure that may cause other issues for this industry although I don't know what. 3) A normal corporation can contract, employ, or give shares/membership to anyone in most countries but what about a trading firm? If the two people in the US and UK want to trade a sub account, who are not customers (ie under CME 106.H rule that "customers" can NOT access the fee, only the corporation can) are there any kinds of restrictions? Also a note regarding customers vs owners, we all have to pay ourselves 99% of our profit and be members of the corporate to kind of satisfy the rule which isn't an issue but just wanted to say that as an FYI. I only skimmed the CME rules when new traders trade and it looks like they just need notification/approval as a formality to ensure the trader isn't a terrorist. But I know nothing else. 4) Do I have to be a member at any regulatory body/authority if I hold the company out publicly as a place where you can be a "partner" and trade at the firm in order to get a low rate? I'm sure someone here has done something like this. I look forward to any advice. Thank you!
Hey Just, i prefer the corp structure just because of the tax preferential treatment and i could pay myself a mix of income and dividends. Also from reading the rules i dont think the cme seats would apply for all accounts but i may be mistaken. If more people want to join there is also a 15min max accounts under the friends and family structure. Lastly there could be issues of people owning their own accounts who live outside of canada vs if they were "employed".