A friend of mine is thinking of starting up as an introducing broker. We have a friend in common that runs a successful HF, and he wishes to raise funds for this firm, and perhaps a a few other HF managers we know. I may well eventually join him. Regulations aside, what needs to be done? He is looking to start and grow a business. Does he need to hold clients' funds himself with a prime broker, or can he operate as a middle-man, without holding funds? Any advice (or questions) would be gratefully received.