Non-pro vs Professional data fees

H

Humble Investor

Hi,

Unfortunately due to recent tax changes in my country, I now would be better of trading through a company. So, I'm planning to incorporate a ltd for my trading. I'm currently thinking of ways to legally avoid being classified as a professional. The only solution I could find is opening an IB's Friends & Family advisor account and listing the company as a subaccount. I was wondering if you think this strategy still works. I found an old thread which someone claims, he's been doing it for years.

https://www.elitetrader.com/et/threads/ib-fa-sub-account-for-an-llc.63742/page-2

https://www.nasdaqtrader.com/content/AdministrationSupport/AgreementsData/subagreemstandalone.pdf

Interesting that Nasdaq considers a single unpaid trustee as non-professional. Maybe this is the way to go?

Really appreciate it if someone can help.
 
Thanks Robert. The Master account will be a natural person, in my case. Would that make a difference?

Below is a 2010 post by someone working at IB:

"So an LLC account that has access to live data is a pro account, even if it is single owner LLC for someone not in any professional financial services capacity.
In an IB financial advisor account structure, the sub-account does not have access to the market data anyway (the user who logs into the sub-account cannot see live data). Accordingly, the sub-account is completely irrelevant for the pro/non-pro question. The FA sees the data. If the FA is a natural person (not an LLC or legal entity), and meets the criteria stated in the declaration (items 2b, 2c), then non-professional status is possible. Any commission generating relationship between the master and sub account pretty clearly makes the activity "professional"."
 
Humble Investor said:
Thanks Robert. The Master account will be a natural person, in my case. Would that make a difference?

Below is a 2010 post by someone working at IB:

"So an LLC account that has access to live data is a pro account, even if it is single owner LLC for someone not in any professional financial services capacity.
In an IB financial advisor account structure, the sub-account does not have access to the market data anyway (the user who logs into the sub-account cannot see live data). Accordingly, the sub-account is completely irrelevant for the pro/non-pro question. The FA sees the data. If the FA is a natural person (not an LLC or legal entity), and meets the criteria stated in the declaration (items 2b, 2c), then non-professional status is possible. Any commission generating relationship between the master and sub account pretty clearly makes the activity "professional"."
More...

Interesting. You can try. If you answer the NYSE questionnaire honestly, it would be a pro market data account.
 
Before I setup my LLC in the US, like your LTD, I had the same thoughts and I even found one US Broker who would classify my company as a non-professional for data, which is wrong.
I agree with Robert regarding the NYSE questionnaire.
Fortunately for me, because of my trading style (number of trades, frequency, etc...) I file my LLC taxes as a business trader (just like a regular company doing business with customers) which can help me to deduct direct business costs from my profits. Not that bad if you can do the same in your country.
Good luck.
 
Thank you Robert.

Thanks Fonz. Yes, I can deduct all sorts of business expenses as well. It is just really hard to start paying few thousand dollars a year instead of $200 a year I'm used to.
 
sadly, the moment you have any kind of entity, you will pay pro fees... no ways around it... the best you can do is get a pro and non-pro account, keep L1 in Pro and L1+2 in non-pro... depending on what markets you trade it will save you some $$$..
 
ofthomas said:
sadly, the moment you have any kind of entity, you will pay pro fees... no ways around it... the best you can do is get a pro and non-pro account, keep L1 in Pro and L1+2 in non-pro... depending on what markets you trade it will save you some $$$..
More...
Thanks. I don't need level 2. I was thinking of the same thing. Keep a bare minimum of $10k in my individual account and move the rest to my pro account and trade on delayed data. Is this legal? anyone else doing this?
 
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