Hi: I am a trading systems developer and would like to provide managed accounts for individuals. I would like to be compliant with the laws am working to boost my credibility and reputation so I am looking at the Series 63, 65 and 66 examinations. Instruments traded are Forex, Options and stocks. I have read and talked to many people with varying opinions and hope to get some guidance here. I read that I could managed up to 15 accounts without registration however if I have more then registration is necessary. Is a Series 63 adequate or do you think it is necessary for the Series 65? Any advice is appreciated.
For managed futures accounts, you need to qualify under the exemptions provided by the NFA. https://www.nfa.futures.org/NFA-compliance/NFA-commodity-trading-advisors/cta-exemptions.HTML For securities accounts, you need to refer to the securities department of your state. Each state has different rules as to when yo have to register as a RIA. Look for the "Investment Advisers FAQs". Here is an example for doing business in NYS. "Registration or notice filing is required with 6 or more clients through the Investment Adviser Regulatory Depository system ("IARD"). " http://www.ag.ny.gov/investor_protection/investment-advisers-faqs
I can't stress how important it is to do this right. I talk to people that ignore the rules and hope they don't get caught. One person told me that Interactive Brokers let's them do it so it must be legal. It is you responsibility to know what to do. If you get one investor that files a complaint, you can have a real issue. Or, if you register in the future and they ask question about your past, that can mess you up to. Consult with someone that knows the rules so you move forward legally. I am not that person but can recommend someone privately that can.
Thank you for the follow up and I agree about your warnings. Both the state (Ohio) and NFA state you are exempt if under 15 clients. However you still must register. Sure if you would like to send the contact information, that would be great. Thanks again for the input. *The state mandates either a Series 65 or a Series 66 with a Series 7.
You can register for the 65 on your own via the U10 form, but not for the 7 or the 66, which requires a sponsoring broker.