Managing other people's money

Hypothetically speaking, if I should decide to manage accounts for a small client base at some point in the future, and charge a fee for my services, what are the necessary requirements from a legal point of view?

For example, in order to trade US futures for UK based client accounts, using an Interactive Brokers Professional Advisor set-up, will I require anything asides from an FSA registration?

I believe the terms CTA and RIA are used in the US, with the series 3 and series 7 qualifications being pretty much the norm for professional advisor's. However I don't know the UK equivalents to these terms/qualifications, so if anyone would enlighten me I'd be grateful.

I spoke to Interactive Brokers UK about this issue and they were fabulously unhelpful in assisting me. I'm simply trying to understand what is required to conduct this kind of operation in an above board manner.

If anyone could kindly advise, I would very much appreciate your help.

Regards,

Sam

Sam,

you and i are both in this position. I am now tempted to ring a prop firm and ask if anyone would be kind enough to give me some info on this. Post something if you find out, i'll do the same.

Cheers Charlie

Does anyone know if it is possible to passport your FSA registration (Sii Certificates) into the US?

Sam,

On every point, you will need FSA authorisation. Look at their web-site. Uk equivalent qualifications are (or were) Futures and Options Rep's exam (plus Compliance paper) and Registered Securities Rep's exam.

SCFX,

Save the cost of 'phone call (and possibly a less friendly response) - read the above.

RagingBull,

"Passporting" is applicable within the EEA (European Economic Arena). Even then, there is a lack of uiniformity across the EEA (which has got to questionable on legal grounds). If you're in the UK, you need UK authorisation; location of markets or any arrangement with a foreign broker are irrelevant. It's where you are.

Why don't all three of you club together and get legal advice from a City firm (a few hundred quid)?

Grant.

grantx said:

"Passporting" is applicable within the EEA (European Economic Arena). Even then, there is a lack of uiniformity across the EEA (which has got to questionable on legal grounds). If you're in the UK, you need UK authorisation; location of markets or any arrangement with a foreign broker are irrelevant. It's where you are.

Why don't all three of you club together and get legal advice from a City firm (a few hundred quid)?

Grant.

Click to expand...

Hi Grant,

I understand what you are and arn't allowed to do while you are working in the UK, but is it possible to get a job in america based on the fact you have passed your Sii Cert's or do you need to sit the Series 7/3 to work out there?

I can't seem to find any information anywhere on the web and wonder if anyone on this board has gone across the atlantic and if they brought their authorisation to give investment advice with them?

Cheers,

RagingBull

look like you need the series 17 then:

http://www.7city.com/nasd.php?area=exams&outline=nasd&course=nasd

Ragin Bull,

I'm 90% certain UK qualifications don't count. To work in the US you'll need the Series 3, etc. However, these can be taken in the UK via the US FIA (Futures Industry Association, Washington) but you'll have to register with the National Futures Association (equivalent to FSA), which involves, inter alia, complete finger-print record (x 2) submitted on FBI finger-print forms (no kidding). The local nick will do this with you (I've done it).

Detail may be subject to revision. Do an internet search on any of the above for up-to-date info.

Don't forget your Green card.

Grant.

grantx said:

Ragin Bull,

I'm 90% certain UK qualifications don't count. To work in the US you'll need the Series 3, etc. However, these can be taken in the UK via the US FIA (Futures Industry Association, Washington) but you'll have to register with the National Futures Association (equivalent to FSA), which involves, inter alia, complete finger-print record (x 2) submitted on FBI finger-print forms (no kidding). The local nick will do this with you (I've done it).

Detail may be subject to revision. Do an internet search on any of the above for up-to-date info.

Don't forget your Green card.

Grant.

Click to expand...

Hey Grant,

Thanks alot for the sound advice, I will look into it. Wow the FBI get involved in the registration over there, I spose they watched rouge trader and took it to heart

Cheers,

Raging Bull

DT said:

look like you need the series 17 then:

http://www.7city.com/nasd.php?area=exams&outline=nasd&course=nasd

Click to expand...

Thats the one DT, nice one. I used 7 City for my other certs aswell... cant believe I didn't check their website!

Cheers,

Raging Bull

grantx said:

Sam,

On every point, you will need FSA authorisation. Look at their web-site. Uk equivalent qualifications are (or were) Futures and Options Rep's exam (plus Compliance paper) and Registered Securities Rep's exam.

SCFX,

Save the cost of 'phone call (and possibly a less friendly response) - read the above.

RagingBull,

"Passporting" is applicable within the EEA (European Economic Arena). Even then, there is a lack of uiniformity across the EEA (which has got to questionable on legal grounds). If you're in the UK, you need UK authorisation; location of markets or any arrangement with a foreign broker are irrelevant. It's where you are.

Why don't all three of you club together and get legal advice from a City firm (a few hundred quid)?

Grant.

Click to expand...

Hi Grant,

thanks for your previous reply. Once i pass the exams am i then allowed to trade client accounts, or do i need to be working at a firm as well as having the appropriate exams? Starting to think it might be easier to start sending my CV to a few prop firms!

Thanks Charlie

Charlie,

To trade clients' accounts but not advise clients, you don't need the exams (unless requirements have been revised) but you need to work for an authorised firm; to trade clients' accounts and advise them, you will need the exams.

I would suggest taking the exams, or at least study for them at a leisurely pace, and start sending out your cv (mention you're studying for the exams). Obviously, your qualifications determine to a large extent prospective employers. Goldman Sachs, Deutsche Bank, Paribas, etc may be ideal but are they a realistic target?

Don't dismiss the small brokers - they may not have the prestige but who gives a shti? It's still a good life if you can make it. Moreover, starting from zero, building a client base and devloping City contacts will aid your advancement for the larger houses in due course.

I'm not sure whether 'Prop shops' are the way to go for learning the ropes; I can't see it. Maybe someone else can advise on this.

Any more questions, just ask.

Grant.