FSA authorisation process, trading OPM

[Chartsy]

What exactly does the FSA authorisation process, which enables you trade trade OPM, involve? I assume i'd need at least a year of trades, on a live account, but is say £5000 sufficient or would you need proof that you're capable of managing 6 figures?

I've also heard that you don't need authorisation to trade OPM so long as you don't offically advertise/solicit for funds...is this true? Surely that's contradicting the legal requirement of authorisation?

edit: Is there such a thing as being too young to pass? Say i'm 19 when I apply? Does trading an account that's not from the UK still have to be authorised?

 

[Brock Landers]

basic it's a frikin nitemare.

 

[Chartsy]

basic it's a frikin nitemare.

Hmmmm care to elaborate?

 

[scose-no-doubt]

As far as I know, you need all sorts of FSA authorisation and competencies to trade other people's money in a commercial capacity i.e. there are ways around it but no matter which way you go it's a legal sh*t-storm that nobody needs unless there's serial guineas in it. I only know about the new(ish) RDR rules and I'm sure they only pertain to investment advice as opposed to trading.

I've always suspected a small offshore CEIF would be a bit easier to set up and give a greater degree of freedom but I've never really looked into it, nor the legality.

 

[Chartsy]

As far as I know, you need all sorts of FSA authorisation and competencies to trade other people's money in a commercial capacity i.e. there are ways around it but no matter which way you go it's a legal sh*t-storm that nobody needs unless there's serial guineas in it. I only know about the new(ish) RDR rules and I'm sure they only pertain to investment advice as opposed to trading.

I've always suspected a small offshore CEIF would be a bit easier to set up and give a greater degree of freedom but I've never really looked into it, nor the legality.

Really is a ****. Do you know if I still need authorisation to trade someone's account not from the UK?

 

[scose-no-doubt]

I'd imagine so.

 

[Chartsy]

What does the actual process involve? What do they check out?

 

[Math Man]

To trade someone else's money you would need to set up a Collective Investment Scheme (e.g more than one person investing), the scheme would need to be FSA regulated and the Trader would need to be FSA regulated. If the fund (scheme) was being held offshore BUT the trader was still in the UK, the trader would still need to be regulated by the FSA.

 

[MajorDutch]

i have my own FSA regulated business (not trading) as an IFA I onlye trade (lose) my own money!. All the information you require is on the FSA website however most people will use a compliance consultant firm to help them make an application. I liken it to buying a house, you could do the legal work yourself but most people hire a lawyer. The consultants I used would be no good for you as they dont deal with people who trade OPM.

I suggest you contact compliance consultants who deal with setting up collective investment schemes and/or hedge funds there are plenty in London if you are UK based. You will need a lot of capital (dont know how much), you will need to be able to demonstrate that you have the experience to carry out the regulated activity.

Unless you have around £30k in consultant fees and at least £100k of your own money in cash AND relevant experience I would forget it until you do. This would be the bare minimum imo. The compliance consultant should be able to advise you on what type of client you can trade for, basically they have to be HNW/sophisticated. i.e. you cant just start trading a retail clients money even if you explain everything to them. just my 2c.