Whose Traded with Capital Traders Group?

Discussion in 'Prop Firms' started by mastertrader456, Aug 31, 2011.

  1. CTG / WTS is CBSX - so no FINRA rule supersedes anything CBSX put out. (Plus the CBOE Oct. 11 was after FINRA's rules in April and in response to FINRA's vague memo).

    I shouldn't have written 'every other bd', you are right, since Echo is PHLX and hasn't had to switch yet. But every CBOE / CBSX firm I know of has, plus Bright and G-2 (which is PHLX).

    Even though G-2 is PHLX, it was forced to switch by its clearing firm, GSEC (Goldman), which is FINRA. Same thing with Bright, which is a Chicago Stock Exchange member (different than CBOE / CBSX). This was also simply because they clear GSEC which is FINRA, who interprets FINRA's post as 80/20 split max.

    And PHLX is owned by Nasdaq now, and outsources its regulation to FINRA. (But they still are governed by the PHLX rule book). Thus still the Series 7s needed. But who knows how long they won't be 80/20, 90/10, or 95/5.

    Point is, if WTS / CTG is flaunting the rule, blatantly clear in the CBOE memo, it is just another concern to add to the list.

    To clear it up, there are phone numbers at the bottom of the CBOE memo. Call them anonymously and ask what they think maximum payouts are. I did.

    Of course you want 99 if it is there, but if it isn't legal / compliant, than you saw what happens ScalperJoe. What is worse about this is that the CBOE memo outlines what happens if the accounts are deemed customer accounts as it says if the accounts receive 'all or virtually all' of the split. They (WTS) are going to retroactively be bound to customer net capital rules, not prop ones. When the recalc is done, if they are under their net capital, they get shut. All firms under net cap minimums are not warned, just shut. Then, as with Team Trading, maybe you do or don't lose your money in the end, but it takes a while to get it back.

    My simple point is why take the risk without making a 3 minute call to the number on bottom and see if they are just flouting the rules. It seems worth the 3 minutes. Or ask WTS compliance how they don't interepret 'all or virtually all' doesn't cover 99%. Or both.


     
    #41     Nov 7, 2011
  2. hitnrun

    hitnrun

    THERE ARE NO SEC RULES ON THE % PAYOUT OF PROFITS PERIOD !!

    YOU KEEP BEATING A DEAD HORSE

    IF YOUR WORRY ABOUT THIS . THEN YOU CAN'T BE A TRADER WITH YOUR WORTHLESS DRIBBLE
     
    #42     Nov 7, 2011
  3. You're right, it's subject to interpretation.

    According to CBOE, it's currently under review by SEC and FINRA. The point of the circulars was to simply provide notice to the firms who pay higher splits.

    I believe it was Goldman, not the SEC, that provided notice to Bright about the 80% cap on payouts.

    If the clearing firms of CBSX props cap the payout to some fixed amount, then it's beyond the trader's control anyway.
     
    #43     Nov 8, 2011
  4. This is like yelling "fire" in an empty theatre.

    As hitnrun correctly stated, there is NO current rule on maximum payouts.

    The CBOE memo neither mentions that net capital rules will be recalculated retroactively, nor does it state that a firm would "get shut."

    Team Trading was never a registered b/d and was shut down by one of the owners, not by any regulatory agency.

    If you called the CBOE, then you know all this is still mumbo-jumbo and it's totally irrelevant until the clearing and non-clearing b/d's get further details. IF and WHEN they cap the payout, it will affect all CBSX firms, not just WTS.
     
    #44     Nov 8, 2011
  5. https://www.cboe.org/publish/RegCir/RG10-101.pdf


    "A split which provides all or virtually all of the P & L to the trader is likely a red flag that the account is a customer account...

    If a review of the factors identified above (along with the guidance provided in this Regulatory Circular and FINRA Notice 10 18), lead to a conclusion that an account is not a sub-account of a proprietary trading broker-dealer organization, then the account will have to be carried as a customer account, consistent with all applicable federal and SRO regulatory requirements respecting the handling of customer accounts.

    Restructuring a non-clearing proprietary trading broker-dealer to accommodate a customer business is a significant undertaking in terms of regulatory, infrastructure and operational requirements, and may not be a viable course of action...

    Questions about this memorandum may be directed to Robert Gardner at (312) 786- 7937 or Milan Markovic at (312) 786-8192."




    FYI: In the US, the Securities industry works as follows:

    The SEC supervises SROs including CBOE / CBSX, FINRA, PHLX, etc.

    CBOE supervises its broker dealers including WTS (and I guess CTG if they are a sub group).

    WTS is supposed to supervise you if you trade there.

    What CBOE says goes for WTS and the rest of the CBOE and CBSX firms. Just call them about the payout rule - anonymously - (phone # at the bottom of the memo) and stop arguing with me. Tell us what they say if you don't find the above clear enough.


    Another FYI:

    Accounts being deemed customer accounts means they will be subject to FINRA (the only SRO which can have customers), and a whole set of additional rules. Have fun trading with 4 to 1 leverage, 25k minimum or no bp that day, and, the firm itself is going to have DIFFERENT NET CAPITAL requirements (but your money will still be stuck there for the lock up unless it was segregated originally, which the CBOE outlawed in the same memo). NET CAPITAL deficiencies will halt a broker dealer's activity (maybe besides liquidate only) and potentially get your money stuck for a significant period, or, since your deposit is a 'capital contribution' it is part of the firm's capital, so they can use it to pay their lawyers and the fines without you having a say on it, if that is the course they want to go.


     
    #45     Nov 8, 2011
  6. hitnrun

    hitnrun

    can you show us a written rule by the sec stating what the exact % of profits are allowed to be paid to any prop trader registered with the cbsx exchange ?

    there is no such sec rule !! face the facts

    probably over 80 % of the prop firms are registered with the cbsx.

    when & if a rule is ever implemented by the sec then you can be the first to let us all know until then your only speculating

    your a broken record just pissing in the wind

    your either paranoid or your a piker with your rants . enough already
     
    #46     Nov 9, 2011
  7. CTG (part of WTS) or whatever CBSX firm are subject to the rule I posted. There doesn't need to be an SEC rule. I'm not sure why you think that. You are clear that there is a difference between FINRA regulations and CBOE ones, right?

    FOR EXAMPLE, Finra prop requires 7, 55, and 63. CBOE requires a 56. Neither of those requirements are SEC requirements. They are set by FINRA for FINRA members and CBOE for CBOE / CBSX firms. Just like CBOE made its rule on the payouts they outlawed that I posted.

    How would the license thing or any other rule difference be the case if broker dealers were only subject to SEC rules?

    I showed you the written rule that matters. Why do you keep denying it? You're not even remotely close on this SEC thing. Its total ignorance and its not even near a valid point.



     
    #47     Nov 9, 2011
  8. hitnrun

    hitnrun

    not sure what the deal is with you mentioning wts or ctg all the time. i guess you have a beef with them?

    You do know there are many other prop firms on the street?

    Just show us proof in writing by sec or the cbsx exchange?

    if not then your speculating

    if you do trade then focus on trading . why worry about bullshit like this?

    tell the firm your with ? You want to take 80% of profits because your feel your in violation of the rules . solves your problem

    the rest of us will take our 99% payout as we should since it's our own money.

    I guess you just don't get it
     
    #48     Nov 9, 2011
  9. at your request - from the CBOE.

    https://www.cboe.org/publish/RegCir/RG10-101.pdf


    "A split which provides all or virtually all of the P & L to the trader is likely a red flag that the account is a customer account...

    If a review of the factors identified above (along with the guidance provided in this Regulatory Circular and FINRA Notice 10 18), lead to a conclusion that an account is not a sub-account of a proprietary trading broker-dealer organization, then the account will have to be carried as a customer account, consistent with all applicable federal and SRO regulatory requirements respecting the handling of customer accounts.

    Restructuring a non-clearing proprietary trading broker-dealer to accommodate a customer business is a significant undertaking in terms of regulatory, infrastructure and operational requirements, and may not be a viable course of action...

    Questions about this memorandum may be directed to Robert Gardner at (312) 786- 7937 or Milan Markovic at (312) 786-8192."
     
    #49     Nov 9, 2011
  10. hitnrun

    hitnrun

    what is the exact % payout allowed stated on this circular ?

    Do you see one? I don't

    What is it?

    all subjective. take a guess?

    great job answering the question . yikes !!
     
    #50     Nov 9, 2011