A Very Dull Post!

[damianoakley]

Hi everyone. This is my first ever post to this site! Sorry it's a bit dull!

I wonder if anyone can help me.

I am a professional trader of the U.S. Stock Markets and I am thinking of either teaching my strategy one-on-one for a single set fee, or making my trades available each day for a monthly fee.

The thing is - where would I stand legally? Do you have to be FSA Registered or something, or can I just include the right legal disclaimer material within my literature?

Any advice or help would be greatly appreciated.

Many Thanks,


Damian

 

[ChartMan]

The key word re FSA is "Investment advice". Teaching a strategy or method is not giving investment advice...

 

[damianoakley]

Thanks.

So i'm basically ok teaching my method as long as I state somewhere that me showing someone my strategy doesn't constitute investment advice and it's for educational purposes only. Have I got that about right?

Does the same apply in allowing people to see my trades every day for a monthly fee?

Thanks in advance for your help.

Damian

 

[ChartMan]

Allowing ppl to see your trades may be seen as inviting them to invest in your methods..... A grey area I feel.......

 

[damianoakley]

I know of at least 2 people / companies that have offered me subscription services in the UK in the past where I can view their trades daily. Nowhere on their material does it state that they are FSA registered.

Both these people / companies state in a disclaimer that their trades are made available for educational purposes only and that no invitation is being made to invest in their methods.

Is this the normal way of getting round the legal element?

Thanks

Damian

 

[ChartMan]

Maybe..... IF you want to be absolutely certain, you should ask the FSA..... Whether or not you will get a definitive answer is another matter.....

 

[damianoakley]

Thank you for your comments and help.

 

[wysinawyg]

I don't do a great deal of regulatory work but when I've spoken to the FSA before they are generally very helpful and will give fairly definitive answers (even when it isn't the answer I want :-(. I would have real concerns though about the monthly bulletin. Whatever you say, the fact is that you are putting out your trades to people who are paying for them and the only reason they would pay for them is if they are intending to follow them. As such you're probably on somewhat dicey ground.

By way of incidentals, Paul Scott (who posts on The Motley Fool UK) had a run in with the FSA when he set up a site that just detailed what he thought were good investments. There wasn't a pay element to this and it was all just a sort of personal home page where he put up his ideas for discussion. Given this, I'm not sure how favourable a reply you'd get from the FSA to a full blown commercial enterprise.

As such maybe safer to proceed without a proper discussion with the FSA (as then you can plead dumb rather than have it be shown that you went into it knowingly) although I would want to run it past a solicitor who deals with this kind of thing to be sure.

Regards,

wysi

 

[Skimbleshanks]

Or perhaps you could take all your huge profits from trading, and go and buy yourself a nice little sand-ringed island lapped by turquoise seas somewhere nice and balmy. You could then run your service from there, which surely would be outside the jurisdiction of the said men in suits? And if your island was in a tax-free region of the world, then all the better!

 

[damianoakley]

Hi,

Despite the 3 smiley faces at the end of your post, I can't help but detect a hint of sarcasm in your comment. I get the feeling that you're basically saying: "If this guy is so successful at trading and earning millions, then why is he bothering to sell his trading strategy and selections?"

Well, there are two reasons. Firstly, everyone assumes that trading success means earning so much money that you never have to work again. Well, my strategy makes between 50% and 100% on my capital each year. I don't start my year with something like £10,000 and then proceed to turn it into £100,000. I make a modest income from trading, and my capital will grow steadily each year with me making regular withdrawals as income. But I'm far from rich at the moment. It would do me no harm to set up a business in which I share my knowledge with some other traders - but I certainly wouldn't give my knowledge for free - and if i did, then I don't think people would think much of it.

The second reason is that trading can be a lonely business. I don't want to become someone who just sits at home all day at my computer. I enjoy interacting with people and enjoy talking to people about trading. Starting a business like the one I've described would get me this interaction every day.

I hope that this goes some way toward explaining my motives.

Many Thanks

Damian

 

[Skimbleshanks]

You are right, I was being naughty - I was actually suggesting that you took your little operation offshore, so no SFA, no taxes, and a nice suntan!

 

[damianoakley]

Thanks for the comment and reply!

I would expect people to question my motives - it's only natural considering the rubbish that's about these days.

At the end of the day, I've nothing to hide. I'll do the whole thing down the straight and narrow AND pay my taxes!

Thanks,

Damian

 

[ChartMan]

It isn't taxes that's the problem here. IF the FSA say you can't do so and so without being registered, then you have a long hard slog in front of you. Did you say you were from the USA? IF so you're outside their jurisdiction anyway....

 

[damianoakley]

I agree - taxes aren't the problem. That was just something else that was mentioned in this thread. And I aren't about to do anything at all without first making sure I'm on the right side of the FSA.

I'm based in the UK - I just trade the U.S. markets.

As far as I can see, there should be no problem in teaching traders one-on-one my strategy. There are lots of other people doing this, and I don't think all of them (if any) are FSA registered. But I fully intend to look into it properly, and starting this post was the first part of my research.

Thanks to everyone for their help and comments.

Damian

 

[ChartMan]

Teaching ppl a strategy, even if it's 1:1 is not a problem. That's what I do on the Daily dow charts here. If there was a problem with that, the FSA would have been on our case years ago. Getting them to follow you into battle is where the problem lies.