Trading other people's money
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Markus,
Eurex denies membership to one-man/sole trader UK member firms, despite what I thought were the reciprocal arrangements of “passporting” (maybe Deutsche Borse does). Then again, since when has consistency been a hallmark of the EU?
“open a hairdressers”? I’d rather invest my money wisely in drink, drugs and prostitutes (and German sports cars).
JK,
What aspect is not a controlled function?
Yes, he can legally trade on his friend’s behalf via a POA, but he can’t derive a benefit from it.
So “placing trades for him, legally” is fine, but illegally not declaring the income is also fine. I think I touched on the absurdity of this above.
Db,
Simplest solution. Jack’s friend gives the money, no paperwork, gentleman’s agreement. Profit split handed over in an envelope in the pub. Any losses, a slap for Jack’s mate for moaning. Total losses, a pick-axe handle to make good. Deny all knowledge
I’ve had enough of this thread.
Grant.
Eurex denies membership to one-man/sole trader UK member firms, despite what I thought were the reciprocal arrangements of “passporting” (maybe Deutsche Borse does). Then again, since when has consistency been a hallmark of the EU?
“open a hairdressers”? I’d rather invest my money wisely in drink, drugs and prostitutes (and German sports cars).
JK,
What aspect is not a controlled function?
Yes, he can legally trade on his friend’s behalf via a POA, but he can’t derive a benefit from it.
So “placing trades for him, legally” is fine, but illegally not declaring the income is also fine. I think I touched on the absurdity of this above.
Db,
Simplest solution. Jack’s friend gives the money, no paperwork, gentleman’s agreement. Profit split handed over in an envelope in the pub. Any losses, a slap for Jack’s mate for moaning. Total losses, a pick-axe handle to make good. Deny all knowledge
I’ve had enough of this thread.
Grant.
I am not going to keep repeating myself grant and you seem to think you are a fountain of knowledge who knows more than everybody else.
Please read through my previous posts.
I don't know why I am getting involved so heavily with this issue when I honestly couldn't care less
Placing trades for him on his account via POA is LEEEGALLLL - please phone CMC, IG, Capital Spreads, Gft... any of them to check
I imagine Scotch has a job, like a normal person, and this isn't a full time career move but merely managing your friends account - if it is a full time career move then he is becoming a full time gambler. The best way to do it is spreadbetting so 'deriving an income' is not an issue, he is part time gambling as far as the tax man or Alistar Darling are concerned - thats a fact.
The only basis of your objections seems to be how the profits are split (you seem to think Scotch is committing a crime profiting??) so please go back to my betting on a horse analogy and convert that into spreadbetting for somebody.
You are making a very simple solution sound very complicated Grant and im not going to respond to your posts because from what I can tell you aren't actually reading/digesting mine. You just pick apart small statements without reading the whole thing.
JK
IF YOU RESPOND PLEASE QUOTE THE WHOLE TEXT INSTEAD OF INCORPORATING 5 WORD SEGMENTS INTO YOUR POST
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Partnering with IG has nothing to do with Scotch's situation.
Setting up a fake company is not necessary if they are friends and trust each other.
He doesn't need to register with EUREX, the FSA or anybody.
He doesn't need to set up a Hedge Fund.
He doesn't need to arrange a personal loan.
ALL HE NEEDS TO DO IS SIGN A DOCUMENT WITH HIS MATE AND SPREADBET OFF HIS ACCOUNT, HE WILL BE UP AND RUNNING WITHIN A DAY.
JK
Setting up a fake company is not necessary if they are friends and trust each other.
He doesn't need to register with EUREX, the FSA or anybody.
He doesn't need to set up a Hedge Fund.
He doesn't need to arrange a personal loan.
ALL HE NEEDS TO DO IS SIGN A DOCUMENT WITH HIS MATE AND SPREADBET OFF HIS ACCOUNT, HE WILL BE UP AND RUNNING WITHIN A DAY.
JK
“We'd be trading FX through a broker rather than spreadbetting”.
Well I am suggesting that doing it through a spreadbetting firm is the simplest and most cost efficient way of going about this - purely due to the tax issues .
“you seem to think you are a fountain of knowledge who knows more than everybody else.”. I know more than some, less than others.
Well based on you input so far on this thread and your odvious admission of defeat I think it is safe to say I know more than you about this issue
JK
BSD
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Profitaker
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I can't see any legal angle with that. Job done Grant ?
Hi profitaker,
From what I can see Grant hasn't actually come up with a realistic solution to Scotch's dilemma?
JK
BSD
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I don't think that there really is any solution outside of forming a hedge fund for handling OPM, leaving tax or legal regulatory issues etc aside for the moment, if all you have is a friend, her money, a handshake and a shared vision of great success in the markets, one shouldn't wonder that if things don't develop as expected you'll soon have none of those, but, instead, a lawsuit or a gun-for-hire after you.
THE MECHANICS OF PLACING TRADES FOR YOUR FRIEND
Your friend sets up a spreadbetting account. When activated he requests a power of attorney form. The account holder and they guy he designates to trade both need to sign it and return it to the SB company.
Now both of them have the power to place and exit trades on the account holders account. The money can only go in and out from the bank account of the guy whose account it is.
WHAT'S IN IT FOR SCOTCH
Agree a percentage profit split with your friend and make sure your mate understands that there are risk involved. His friend can't sue him as the both signed a legally binding agreement for scotch to place trades on his behalf.
The account holder can withdraw money when he wants and simple transfer scotch's profit share into scotch's bank account.
THE ABOVE IS TOTALLY LEGAL IF DON VIA SB AND AS I SAID BEFORE, IT'S ONLY THE TAX ISSUES IF DONE VIA MARGINED FOREX
The key issue here is that they are friends. They don't need to set up a hedge fund and honestly it is rather hilarious that you believe that to be the only solution.
Many investment clubs operate in this manor through SB companies. It's normally set up in the chairmans name and he then assigns traders from the club to manage the account with him.
JK
Your friend sets up a spreadbetting account. When activated he requests a power of attorney form. The account holder and they guy he designates to trade both need to sign it and return it to the SB company.
Now both of them have the power to place and exit trades on the account holders account. The money can only go in and out from the bank account of the guy whose account it is.
WHAT'S IN IT FOR SCOTCH
Agree a percentage profit split with your friend and make sure your mate understands that there are risk involved. His friend can't sue him as the both signed a legally binding agreement for scotch to place trades on his behalf.
The account holder can withdraw money when he wants and simple transfer scotch's profit share into scotch's bank account.
THE ABOVE IS TOTALLY LEGAL IF DON VIA SB AND AS I SAID BEFORE, IT'S ONLY THE TAX ISSUES IF DONE VIA MARGINED FOREX
The key issue here is that they are friends. They don't need to set up a hedge fund and honestly it is rather hilarious that you believe that to be the only solution.
Many investment clubs operate in this manor through SB companies. It's normally set up in the chairmans name and he then assigns traders from the club to manage the account with him.
JK
BSD
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JK, now then, I'm not a lawyer let alone one versed in British law, I'm just a poor political scientist who ended up trading in a bathrobe when not nursing a hangover, but taking things from the other side, why would, in most countries in the world, the laws concerning the handling of other peoples money be so stringent if it were as easy as that ?
Why would anyone bother starting a fund if all it takes is doing what you recommend ?
Is what you say feasible only if you have no more than one client ?
Are assets under management levels not to be breached the key point ?
If your example is all it takes, you wouldn't even have to start a hedge fund if for example you had fifty or so people lined up who want you to trade their millions, you could go down your path with every single one of them as opposed to combining them all in one fund ?
Why would anyone bother starting a fund if all it takes is doing what you recommend ?
Is what you say feasible only if you have no more than one client ?
Are assets under management levels not to be breached the key point ?
If your example is all it takes, you wouldn't even have to start a hedge fund if for example you had fifty or so people lined up who want you to trade their millions, you could go down your path with every single one of them as opposed to combining them all in one fund ?
You raise some good issues BSD and I don't know the answers to them all.
I just know for a fact that I am currently using the agreement I outlined above and it is totally legal. Are there any limits on how many people you can do it for? Im not sure but if there is none then we may have found a loophole. One account can have up to 3 designated traders if I remember a conversation I had recently.
Hedge Funds are merely unregulated pools of cash and yes I suppose that assigning somebody to trade of your account does make that guy chief investment officer for your mini hedge fund.
He couldn't place and add in the FT saying ''Scotch's discretionary SB account management'' and I bet most people wouldn't feel comfortable giving full control of their account to somebody.
Based on the situation Scotch outlined in his first post, this is the best way to do it. There may be others that require cash outlays and company registration etc.. but thats all to expensive and complex for me when there is a much easier way.
Where is Scotch by the way?
JK
JK,
Since when did tax evasion become legal? If you perform a service for someone and they pay you for it, it is taxable income. There's no way round this.
Also, Investment clubs are regulated by the FSA and must follow FSA rules which don't include someone getting paid for managing the investment.
Since when did tax evasion become legal? If you perform a service for someone and they pay you for it, it is taxable income. There's no way round this.
Also, Investment clubs are regulated by the FSA and must follow FSA rules which don't include someone getting paid for managing the investment.
1. Spreadbetting is tax free. Scotch is a ''proffessional gambler'' in the eyes of the government. (as I have said before)
2. An investment club is a group of people who meet together and discuss investment opportunities (most are not regulated). They put cash together and buy shares. A few are looking towards spreadbetting to either hedge exposure or make the most of their money .
I am not going to comment any more on this issue
JK
BSD
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Markus,
DB's would be second on my list. Being popular with footballers there is a touch of the "naff" about them. Here's my choice:
http://www.autonews24h.com/Auto-Industry/DaimlerChrysler/Mercedes/Mercedes_SL_55_AMG.html
I hope you and your friend, Johnny have a good weekend.
Grant.
DB's would be second on my list. Being popular with footballers there is a touch of the "naff" about them. Here's my choice:
http://www.autonews24h.com/Auto-Industry/DaimlerChrysler/Mercedes/Mercedes_SL_55_AMG.html
I hope you and your friend, Johnny have a good weekend.
Grant.
BSD
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Nice choice Grant. But you in a DB would also be quite different than some ole footballer. Imo people make cars, not cars people.
Re Johnny, now personally I'm of the opinion that he's a pretty good fellow, thing is unfortunately my wife doesn't see eye to eye on that, and her being Scandinavian means she has the last word on things, so I'm afraid I'll have to make do with some red wine and beer this weekend. (@_@)
To be honest though, must admit that worse fates could befall one.
Have a great weekend you too
Re Johnny, now personally I'm of the opinion that he's a pretty good fellow, thing is unfortunately my wife doesn't see eye to eye on that, and her being Scandinavian means she has the last word on things, so I'm afraid I'll have to make do with some red wine and beer this weekend. (@_@)
To be honest though, must admit that worse fates could befall one.
Have a great weekend you too
BSD
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Grant, well, grass-is-always-greener-on-the-other-side-ism eh ;-)
To be honest tho, nothing is quite as much fun as spending time, or, even better, living abroad or moving around. Nothing much can surprise you in your own country, everything is known, where's the adventure in that.
Here's to ExPat-ism
Love London, btw. One of my best buddies is from there, funnily enough married with a Scandinavian girl too. We met up there, and then we met our future wives at pretty much the same time too during our stay there.
To be honest tho, nothing is quite as much fun as spending time, or, even better, living abroad or moving around. Nothing much can surprise you in your own country, everything is known, where's the adventure in that.
Here's to ExPat-ism
Love London, btw. One of my best buddies is from there, funnily enough married with a Scandinavian girl too. We met up there, and then we met our future wives at pretty much the same time too during our stay there.
