FSA Regulations

8CMJ

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Hello,

I have been asked by family and friends to trade and invest thier money as I see fitusing a Spread Betting account. Does anybody else do this? Do I have to register to the FSA?

I can't find any regulations on the FSA Site and I have emailed them to enquire, but I'm just wondering if anyone has any advice on the subject.

Thanks,

CMJ
 
Are you professional ? I would like to say to you don't manage or invest any money of your family or friends,
because probably will get problems. Trust me, if want be friend of them, stay far away.

Only big players can survive in Financial Market. Good Lucky
 
Are you professional ? I would like to say to you don't manage or invest any money of your family or friends,
because probably will get problems. Trust me, if want be friend of them, stay far away.

Only big players can survive in Financial Market. Good Lucky

Define a professional trader? I'm trading successfully. That was my concern with problems escalating as they do when money is involved so I went to a solicitor to have a contract wrote up but he said he's not sure wether the idea is legit and said I need to contact the FSA and enquire wether I need to be registered. Was just wondering if anyone had any experience in this area.

Thanks for the opinion though,
CMJ
 
Hi As far as I'm aware, you need to comply to FSA regs if you are managing anyone other than your own money
Can't find the document yet
good luck
 
Hi As far as I'm aware, you need to comply to FSA regs if you are managing anyone other than your own money
Can't find the document yet
good luck

Yes that's what my solicitor thinks also. When I have scanned the FSA site though, they do not regulate spread betting by any sort of means as it is seen as gambling as we all know. Well I will let you all know as soon as the FSA reply to my enquiry.

Thanks for the reply,

CMJ
 
Hello everyone,

I am new to this site but I am desperate to find an answer to the question I need to follow up for my boss.
The thing is:

1) wewant to register as CTA but through opening a UK company (LLC most likely)
2) Series 3 are set and done, up to UK firm registration.
3) I've been trying to contact FSA in terms of regulation rules for a situation like ours but no response for a week now....tried different emails and contact lists.

Please help me clarify if we would have to get registered with FSA if we want to open CTA through UK jurisdiction.
Will we need to pay 1500 or 5000? Will we need to take any exams per FSA requirements even if we have Series 3 with NFA? The application process

Is it a practical thing to do to register in offshore as CTA?


Sorry for to many questions, it's been killing me for a week now(

Any helpful comment or PM are deeply appreciated.

Liliya
 
Hello,

I have been asked by family and friends to trade and invest thier money as I see fitusing a Spread Betting account. Does anybody else do this? Do I have to register to the FSA?

I can't find any regulations on the FSA Site and I have emailed them to enquire, but I'm just wondering if anyone has any advice on the subject.

Thanks,

CMJ

The answer in short is NO.

NOTE: This applies to spreadbetting and not CFD's or DMA or any other trading related contracts. Spreadbetting is gambling and therefore not subject to U.K tax on winnings as per the gambling act and under current legislation.

Firstly you will not be trading, you will be gambling.

Secondly you are not managing anyones money, you are taking it and gambling with it.

Both trading and managing peoples money are two totally different things from gambling.

Put it this way so it's easier to understand:

A friend of yours gives you a sum of money and ask's you to place bets at the bookies on horses that you feel fit as you have been picking winners recently and have been studying their form. Over the time period and should you win you give him back the money plus winnings (NOTE: not profits - Winnings), should you lose, he doesn't get anything back - obviously.

So....Would you need to be FSA registered to do this.....NO

For the reason of clarity, draw up a contract so both parties fully understand the risks, you can do this yourself and is advisable to be done with all parties and request their input so they feel involved. If you are talking large sums of money then it would be advisable to involve a solicitor and get further advice. People can get extremely strange when they lose money. To make it worth your while make sure it pays you decently or otherwise you may as well continue on your own. Look at what typical fund managers charge and work from there. You shouldn't be any cheaper as remember you are allowing them a small buy in..

My other advice would be not to pander to these people and make it absolutely clear that they could lose all of their money. Just because they are family does not mean you cannot lose their money, be careful of this as this can/will add stress that otherwise you may not have had. Added stress can/will affect a traders performance.

In short I would actually not recommend it at all and would suggest that if you are to go down this route then go trade with a prop house or arcade, they don't get upset if you lose their money, they just fire you instead.

Better to lose your job than lose your family.

Hope this helps,

Lee
 
Please do not gamble with other people's money and/or in their name. It can be easily seen as fraud by the bookie (e.g. spread betting firm), if they realise what you are doing and they will refuse any withdrawals.

I am far from advertising anything, but can't you set up an account on a site like Zulu Trade and ask your friends to follow your trades ? If you are that good, you will get many other followers as well and make more money. I see this as a "clean" solution, without any legal issues.
 
Define a professional trader?

Somebody with a 5 year back to back record of CONSISTENT profitability accompanied by low levels of drawdown (under 10%, better is under 5%).

And that track record is easily verfied. if one doesn't have that they're a pretender and should be classed as amateur (in very small letters).

As others have said, you're on very shaky ground offering to manage friends/family money because they will be CLUELESS about the proper expecations, ie they'll think your business is like a mature business, ie one that produces a STEADY and PREDICTABLE profit stream similar to a job. They will therefore expect the monthly statements to show a profit every month (regardless of whether you eduate them or not, they won't listen). So the first time you lose money they will get very fraught and that in turn might effect you mentaly which in turn might effect your trading which in turn might effect them some more and on and on.

If you can make money then the best bet is to have only one client, YOU.
 
The answer in short is NO.

NOTE: This applies to spreadbetting and not CFD's or DMA or any other trading related contracts. Spreadbetting is gambling and therefore not subject to U.K tax on winnings as per the gambling act and under current legislation.

Firstly you will not be trading, you will be gambling.

Secondly you are not managing anyones money, you are taking it and gambling with it.

Both trading and managing peoples money are two totally different things from gambling.

Put it this way so it's easier to understand:

A friend of yours gives you a sum of money and ask's you to place bets at the bookies on horses that you feel fit as you have been picking winners recently and have been studying their form. Over the time period and should you win you give him back the money plus winnings (NOTE: not profits - Winnings), should you lose, he doesn't get anything back - obviously.

So....Would you need to be FSA registered to do this.....NO

For the reason of clarity, draw up a contract so both parties fully understand the risks, you can do this yourself and is advisable to be done with all parties and request their input so they feel involved. If you are talking large sums of money then it would be advisable to involve a solicitor and get further advice. People can get extremely strange when they lose money. To make it worth your while make sure it pays you decently or otherwise you may as well continue on your own. Look at what typical fund managers charge and work from there. You shouldn't be any cheaper as remember you are allowing them a small buy in..

My other advice would be not to pander to these people and make it absolutely clear that they could lose all of their money. Just because they are family does not mean you cannot lose their money, be careful of this as this can/will add stress that otherwise you may not have had. Added stress can/will affect a traders performance.

In short I would actually not recommend it at all and would suggest that if you are to go down this route then go trade with a prop house or arcade, they don't get upset if you lose their money, they just fire you instead.

Better to lose your job than lose your family.

Hope this helps,

Lee

Thank you very much Lee. This is much appreciated

CMJ
 
The answer in short is NO.

NOTE: This applies to spreadbetting and not CFD's or DMA or any other trading related contracts. Spreadbetting is gambling and therefore not subject to U.K tax on winnings as per the gambling act and under current legislation.

Firstly you will not be trading, you will be gambling.

Secondly you are not managing anyones money, you are taking it and gambling with it.

Both trading and managing peoples money are two totally different things from gambling.

Put it this way so it's easier to understand:

A friend of yours gives you a sum of money and ask's you to place bets at the bookies on horses that you feel fit as you have been picking winners recently and have been studying their form. Over the time period and should you win you give him back the money plus winnings (NOTE: not profits - Winnings), should you lose, he doesn't get anything back - obviously.

So....Would you need to be FSA registered to do this.....NO

For the reason of clarity, draw up a contract so both parties fully understand the risks, you can do this yourself and is advisable to be done with all parties and request their input so they feel involved. If you are talking large sums of money then it would be advisable to involve a solicitor and get further advice. People can get extremely strange when they lose money. To make it worth your while make sure it pays you decently or otherwise you may as well continue on your own. Look at what typical fund managers charge and work from there. You shouldn't be any cheaper as remember you are allowing them a small buy in..

My other advice would be not to pander to these people and make it absolutely clear that they could lose all of their money. Just because they are family does not mean you cannot lose their money, be careful of this as this can/will add stress that otherwise you may not have had. Added stress can/will affect a traders performance.

In short I would actually not recommend it at all and would suggest that if you are to go down this route then go trade with a prop house or arcade, they don't get upset if you lose their money, they just fire you instead.

Better to lose your job than lose your family.

Hope this helps,

Lee

I agree with Lee, many thanks
 
Hello again, guys!

Please comment whoever has knowledge of this!
Hello everyone,

I am new to this site but I am desperate to find an answer to the question I need to follow up for my boss.
The thing is:

1) wewant to register as CTA but through opening a UK company (LLC most likely)
2) Series 3 are set and done, up to UK firm registration.
3) I've been trying to contact FSA in terms of regulation rules for a situation like ours but no response for a week now....tried different emails and contact lists.

Please help me clarify if we would have to get registered with FSA if we want to open CTA through UK jurisdiction.
Will we need to pay 1500 or 5000? Will we need to take any exams per FSA requirements even if we have Series 3 with NFA? The application process

Is it a practical thing to do to register in offshore as CTA?


Sorry for to many questions, it's been killing me for a week now(

Any helpful comment or PM are deeply appreciated.

Liliya
 
The answer in short is NO.

NOTE: This applies to spreadbetting and not CFD's or DMA or any other trading related contracts. Spreadbetting is gambling and therefore not subject to U.K tax on winnings as per the gambling act and under current legislation.

Firstly you will not be trading, you will be gambling.

Secondly you are not managing anyones money, you are taking it and gambling with it.

Both trading and managing peoples money are two totally different things from gambling.

Put it this way so it's easier to understand:

A friend of yours gives you a sum of money and ask's you to place bets at the bookies on horses that you feel fit as you have been picking winners recently and have been studying their form. Over the time period and should you win you give him back the money plus winnings (NOTE: not profits - Winnings), should you lose, he doesn't get anything back - obviously.

So....Would you need to be FSA registered to do this.....NO

For the reason of clarity, draw up a contract so both parties fully understand the risks, you can do this yourself and is advisable to be done with all parties and request their input so they feel involved. If you are talking large sums of money then it would be advisable to involve a solicitor and get further advice. People can get extremely strange when they lose money. To make it worth your while make sure it pays you decently or otherwise you may as well continue on your own. Look at what typical fund managers charge and work from there. You shouldn't be any cheaper as remember you are allowing them a small buy in..

My other advice would be not to pander to these people and make it absolutely clear that they could lose all of their money. Just because they are family does not mean you cannot lose their money, be careful of this as this can/will add stress that otherwise you may not have had. Added stress can/will affect a traders performance.

In short I would actually not recommend it at all and would suggest that if you are to go down this route then go trade with a prop house or arcade, they don't get upset if you lose their money, they just fire you instead.

Better to lose your job than lose your family.

Hope this helps,

Lee

Fantastic response and very thoughtful. Everyone raise a glass to this gentleman.

:cheers:
 
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