Kindly answer if you are familar with CPO laws

DarthSidious

DarthSidious

I have been informally managing some money for <b>family & friends</b> for some time, trading commodities only. I am not a registered CPO, and my understanding is this not required based on our account size and since we do not have any outside investors.

Things have been going okay so far, and I would like to organize this a bit. I would like to charge a performance fee (no expenses + 30% of profits above a benchmark. If benchmark returns 10%, and we do 50%, I get paid 30% of 40%)

Ordinarily, investors in commodity trading pools need to be "accredited investors". Since this is strictly family & (very close) friends, do they need to be "accredited investors" for me to legally charge this performance fees? All of us are in agreement with this arrangement, of course.
 
Since free and unprofessional advice appears unavailable (setting aside any concerns about its veracity), perhaps your next step might be to seek professional advice and pay for it.

They will be familiar with the law (which you can read here) and can advise you about those delightful things called Exemptions.
 
MGJ, Thanks for your reply and the link. There are various reasons why I haven't approached a "professional"

1) This is a business. I am unwilling to allocate more than say 5% of the fund per year to "overheads", of which consulting a professional is a part

2) Worst case scenario: NFA or some other regulator would accuse me of breaking some rule - none of my partners ever will. They will say anything / sign anything, dated anything to protect my ass

3) I can read up the rules, like the one's you have posted. Thanks again, and I look forward to some more contributions from other ET members
 
File for exemption from the NFA. Case closed.



Quote from DarthSidious:

MGJ, Thanks for your reply and the link. There are various reasons why I haven't approached a "professional"

1) This is a business. I am unwilling to allocate more than say 5% of the fund per year to "overheads", of which consulting a professional is a part

2) Worst case scenario: NFA or some other regulator would accuse me of breaking some rule - none of my partners ever will. They will say anything / sign anything, dated anything to protect my ass

3) I can read up the rules, like the one's you have posted. Thanks again, and I look forward to some more contributions from other ET members
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