Do I need to be regulated by the FCA?

terryzz5

Junior member
45 2
Do I need to be regulated by the FCA if I open a advisor account to trade for some of friends' money? Just 3 of mine friends

Can anyone tell me?

Many Thanks,:)
 
L

Liquid validity

0 0
Do I need to be regulated by the FCA if I open a advisor account to trade for some of friends' money? Just 3 of mine friends

Can anyone tell me?

Many Thanks,:)
FCA Ask a question
Strictly speaking yes, you need to be regulated.

You could just put their money into your account and trade it.
If it goes south, they get cold feet or you just have bad drawdown,
things will change rapidly.
Its a massive risk to assume that won't happen.
In that case you are wide open to this:
How we enforce the law - Financial Conduct Authority
FCA said:
We can take action such as:

withdrawing a firm's authorisation;
prohibiting individuals from carrying on regulated activities;
suspending firms or individuals from undertaking regulated activities;
fining firms or individuals who breach our rules or commit market abuse;
applying to the Court for injunctions and restitution orders; and
bringing criminal prosecutions to tackle financial crime, such as insider dealing or unauthorised business
FS Handbooks

So for that reason, I would suggest you don't do it.
Your choice, if your friends are persistent, show them this post.
You are wide open to criminal and civil prosecution if it hits the fan.
 
Last edited:

Hoggums

Senior member
2,176 878
There was a member of T2W who did that, took in substantial sums of money from other members, started losing it and lied to investors about how he was doing.

Eventually he ran out of money and the game was up - FSA got hold of him for unauthorised activity and he is now banned from anything trading related, investors went after him was also made bankrupt.

So think carefully - if you lose money for these people - just how good are these friends of yours?
 

timsk

Legendary member
7,612 2,383
Hi terryzz5,
Very sound advice from both L_v and Hoggums, IMO.

If your friends are 100% certain they want to proceed and understand and accept fully that they may never see a penny of their money again, then there is another alternative to consider. They can open and fund their own accounts and give you access to trade them on their behalf. It gets around the issue of regulation and there's no danger of you walking off with their money. You can still lose it all of course - but you can't nick it! Also, assuming you're doing it for a share of the profits, you'll be beholden on them to pay you your share - assuming all goes according to plan. So, you and your friends really need to trust one another.
:p
Tim.
 

terryzz5

Junior member
45 2
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bhavin987

Junior member
13 1
Thanks for all. I've asked my broker. He said that according to the UK law, I can trade for less than 15 people without being FCA. Is it right?

BS
No UK broker will allow this! if there are then do let me know, i would be interested.
But yes those brokers in Mauritius or Cyprus will allow without you being regulated
then the question is how safe is the broker? are your funds safe?

FCA regulation? is it costly? anyone has any experience? knowledge?
 

spinola

Established member
614 138
There was a member of T2W who did that, took in substantial sums of money from other members, started losing it and lied to investors about how he was doing.

Eventually he ran out of money and the game was up - FSA got hold of him for unauthorised activity and he is now banned from anything trading related, investors went after him was also made bankrupt.

So think carefully - if you lose money for these people - just how good are these friends of yours?

Is there a list of these banned individuals for the public to monitor ?

And how are members at T2W protected from future grooming on these boards ?
 

Purple Brain

Experienced member
1,613 179
no, but I have a limition. I can only provide advising service for less than 15 people and less than total of 23 million dollars.
Are you saying 'no' you haven't opened a Financial Advisor Account with IB or 'no' you have opened it, but you did so without them requiring any professional accreditation conformation from you?

If you're still UK based then I understand you will require FCA authorisationAND you'll need to pay UK taxes on your fees & profits which I understand you were unhappy to do a year or so ago.
 

random12345

Established member
793 280
I don't know. I have a limition that I can only trade for less than 15 people and manage the total of 23 million dollars.

Means nothing - you need them to point out where in the act and the Regulated Activities Order that you're covered for exemption. You might fall under some kind of appointed representative exemption, but my understanding was that the appointer had to be regulated in this instance. On the other hand, it's possible that you may not be carrying on a business in the view of the act, but then this is hard to establish for futures trading if you ask me as rarely is it mentioned except as a regulated activity.

As unlikely as it is, if the sh!t hits the fan and this guy ships you to the FCA, IB will not help you - you need to help yourself first and see exactly where you are covered. All of this stuff is a matter of public record (legislation.gov.uk) so they should be able to send you links.
 
 
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