Nothing has changed with us. My Compliance and my Exchange have heard nothing to be concerned about. If we need to adapt for some reason, we'll simply adapt.
Don
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PDT Rule & Prop Firms
- Thread starter tito
- Start date
Nothing has changed with us. My Compliance and my Exchange have heard nothing to be concerned about. If we need to adapt for some reason, we'll simply adapt.
Don
Could a llc prop firm take $5,000 in from a new trader as a purchase of (shares) ownership in the llc prop. This way the new trader would actually own part of the firm he would be trading for - each trader would get paid 95% of the profits generated by themselves and the other 5% goes into the firm (to those who own the majority stake and provide the leverage).
* Now with this scenario, how would/could commissions be handled legally per the current situation?
* Would this type of business structure possibly allow for more than 4:1 leverage?
* Now with this scenario, how would/could commissions be handled legally per the current situation?
* Would this type of business structure possibly allow for more than 4:1 leverage?
What we have learned is that all of these SUB-LLC are technically breaking SEC rules but continue to exist b/c :
1.the PROP FIRMS owners are making money from commissions charges to its traders and
2.traders are able to trade with little money down and low low commish rate.
So far this relationship helps both parties and will continue to exist.
Similar to a prostitution ring where guys get laid and girls get money for easy work. We all know this is legal but cannot be stopped and will always continue until the end of time.
It seems the SEC would have a difficult time shutting down all these NON-REGISTERED prop firms unless someone complaints to the SEC about one of them.
1.the PROP FIRMS owners are making money from commissions charges to its traders and
2.traders are able to trade with little money down and low low commish rate.
So far this relationship helps both parties and will continue to exist.
Similar to a prostitution ring where guys get laid and girls get money for easy work. We all know this is legal but cannot be stopped and will always continue until the end of time.
It seems the SEC would have a difficult time shutting down all these NON-REGISTERED prop firms unless someone complaints to the SEC about one of them.
If people of this board think the prop model is going away you are sadly mistaken. The SEC action came as a result of a routine audit of GLB. Large commission checks paid to one rep was a huge red flag and they dug deeper. A licensed rep owning a trading LLC is a HUGE no-no. Anyone who has a series 7 knows this. This is not a "wake up" call to the industry to clean up its act. Vultures like that Green guy come out of the woodwork spreading lies (like the one that the SEC did an emergency shut down and the accounts are frozen...both huge lies and I'm sure he will be sued for that).
Smart prop firms will take this opportunity to make sure their structure is sound. But at the end of the day, prop trading will be alive and well.
Smart prop firms will take this opportunity to make sure their structure is sound. But at the end of the day, prop trading will be alive and well.
Quote from hedgefund07:
If people of this board think the prop model is going away you are sadly mistaken. The SEC action came as a result of a routine audit of GLB. Large commission checks paid to one rep was a huge red flag and they dug deeper. A licensed rep owning a trading LLC is a HUGE no-no. Anyone who has a series 7 knows this. This is not a "wake up" call to the industry to clean up its act. Vultures like that Green guy come out of the woodwork spreading lies (like the one that the SEC did an emergency shut down and the accounts are frozen...both huge lies and I'm sure he will be sued for that).
Smart prop firms will take this opportunity to make sure their structure is sound. But at the end of the day, prop trading will be alive and well.
You might want to read up, they did freeze the assets of Tuco and everything must go through a receiver.
You are sadly mistaken. The accounts are in receivership. This is NOT the same thing as being frozen. Its actually the complete opposite. Feel free to call the receiver and they will tell you this.
Quote from nyxtrader:
You might want to read up, they did freeze the assets of Tuco and everything must go through a receiver.