You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
CTA and Outside Forex Traders - Can I do this?
- Thread starter danger66
- Start date
Because I already did that and they were rude and unhelpful. The guy I spoke to was a moron. It seems that everyone has mixed feelings/experiences about the NFA.Quote from sim03:
Picking up the phone and calling the NFA will take a few minutes of your time. Cost to you: $0.
Follow up with an email, to confirm that your understanding is correct and to have a written record.
Why not go directly to the source, instead of the ET brain trust?
Dan call the NFA and try again - they've always been very helpful to me. If you get a moron, then hang up and dial back in.
From what I know and who I talk to (including several FCM/FDM's) about this, unregistered entities whether they are traders or IB's cannot be paid by the FDM/FCM's. What you could do is become a CTA yourself and hire the unregistered traders as your traders, but realize you are exposing yourself very greatly for liability purposes if they misrepresent you or your firm. You also have the DDoc issue to tackle.
I would not recommend doing that but it certainly is an option.
From what I know and who I talk to (including several FCM/FDM's) about this, unregistered entities whether they are traders or IB's cannot be paid by the FDM/FCM's. What you could do is become a CTA yourself and hire the unregistered traders as your traders, but realize you are exposing yourself very greatly for liability purposes if they misrepresent you or your firm. You also have the DDoc issue to tackle.
I would not recommend doing that but it certainly is an option.
Thanks, ssblack. Even if I "hire" a trader, doesn't he still have to register with the NFA (even if the firm is registered)?Quote from ssblack:
Dan call the NFA and try again - they've always been very helpful to me. If you get a moron, then hang up and dial back in.
From what I know and who I talk to (including several FCM/FDM's) about this, unregistered entities whether they are traders or IB's cannot be paid by the FDM/FCM's. What you could do is become a CTA yourself and hire the unregistered traders as your traders, but realize you are exposing yourself very greatly for liability purposes if they misrepresent you or your firm. You also have the DDoc issue to tackle.
I would not recommend doing that but it certainly is an option.
Who is at risk; the owners of the firm or me for being the series 3 registered AP for the firm?
Thanks.
the traders your firm hired would have to be registered as part of the firm, (series 3 etc.) The firm that houses would be exposed, and there penalty would be a serious fine from the NFA. The spot industry is changing and the scrutiny is on the FCM's that offer off exchange fx trading and the fines etc that is being imposed on these firms is increasing, that is why most of the major firms will require registration.
Quote from danger66:
Thanks, ssblack. Even if I "hire" a trader, doesn't he still have to register with the NFA (even if the firm is registered)?
Who is at risk; the owners of the firm or me for being the series 3 registered AP for the firm?
Thanks.
They don't *have* to be licensed, but in that case you / your firm who hires them holds full liability for their actions. Again I would not recommend doing this. It's much easier to have them register (and cheaper too, in the long run!).
The last poster is also correct in stating that most FCM's are requiring all traders to be registered. However if your registered entity is designated as the trader on the account, then anyone else you have trade the account technically wouldn't have to be registered. But again, that's a sick can of worms you are opening on yourself if the shiz hits the fan.