Do trading arcades need FSA authorisation?

[ragingbull8]

Hi,

I am curious if anyone knows if trading arcades need authorization from the FSA? As they are not giving advice or influencing individuals investment decisions, is it necessary to seek authorization?

Cheers,

RagingBull

 

[Directional]

its not necessary, depending on how the arcade is setup.

If the arcade is providing facilities for "own accounters" - traders who trade their own cash, then it might be desirable to have FSA in order to provide a measure of security in the form of regulatory capital on deposit in the event of any traders blowing up and taking the firm down. but AFAIK its not essential.

If the firm does purely prop and backs traders with company cash then FSA gives no advantage or protection IMO, and isnt necessary from a regulatory standpoint either I think.