No, they must have filed the U-4 and pre-pay for the exam, all the normal steps.
Don
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Prop firm, no Series 7, yes k1
- Thread starter Trader588
- Start date
No, they must have filed the U-4 and pre-pay for the exam, all the normal steps.
Don
Quote from Hydroblunt:
Maybe at Bright, due to the restrictions your firm places, but throughout the industry there are absolutely ZERO advantages to getting Series 7/55 licenses. Only disadvantages.
Firms don't want traders taking out money every week or so, especially trying to take out the day's profits. Rather have them keep some kind of balance.
Also, sporadic requests from 100s of traders is not something a firm wants. It's wise to keep it orderly by specifying dates for requests & withdrawals.
I suppose that's debatable, and if you have a Couple $million to trade with, don't need leverage, don't mind matching trades, don't mind the additional FICA burdens, etc. But, as with all the stock the exchange member firms, S7 is just a simple requirement.
Regarding withdrawals. Our traders are running a business, not employee-types, so they may draw money when needed, just like any business owner. Some never take money out, some a couple times per month as needed. Not a big accounting hurdle with ACH.
All the best,
Don
Quote from Don Bright:
I suppose that's debatable, and if you have a Couple $million to trade with, don't need leverage, don't mind matching trades, don't mind the additional FICA burdens, etc. But, as with all the stock the exchange member firms, S7 is just a simple requirement.
I do not know where you get your information, Don.
You do not need a S7 & S55 for ANY of this. Back in 2003, yes you had to be licensed to get these benefits. Not anymore. Plenty of "prop" firms where you do not need to be licensed, still get great leverage with no need for matching trades. Additional FICA burdens, no clue bout that, I'm very aggresive on my taxes so I prefer a K1.
What I do remember about being licensed is the annoyance of renewing the licenses and the regulation. I especially loved the oversell violations due to the specialist holding orders, and the excessive fines that followed. Also, the fees onto the firm which always found their way onto the trader.
Regarding withdrawals. Our traders are running a business, not employee-types, so they may draw money when needed, just like any business owner. Some never take money out, some a couple times per month as needed. Not a big accounting hurdle with ACH.
All the best,
Don
Good stuff, definitely a benefit over the competition.
Hmmm? Assent, RBCarlin, Echo, Bright, Schoney, and the exchange members still require S7. Some may have a "retail wing" if they want the NASD hassles, not sure.
With ARCA/NYSE the Specialist concerns are no longer. No more Specialist fees for orders over 5 minutes, etc. Things change, we adapt.
FWIW, the "Continuing Education" is first 2 years away, then 3 years after that, and you "cannot" fail, they just keep asking the same questions until you get them right, LOL.
Anyway, I have the best Compliance Officer in the business (Hi Diane, LOL)...and if she thought we could eliminate the S7 requirement, she would tell me.
All the best, good discussion!
Don
With ARCA/NYSE the Specialist concerns are no longer. No more Specialist fees for orders over 5 minutes, etc. Things change, we adapt.
FWIW, the "Continuing Education" is first 2 years away, then 3 years after that, and you "cannot" fail, they just keep asking the same questions until you get them right, LOL.
Anyway, I have the best Compliance Officer in the business (Hi Diane, LOL)...and if she thought we could eliminate the S7 requirement, she would tell me.
All the best, good discussion!
Don
We now have several people saying that s7, etc is not necessary, and the head of one firm saying he doesn't know what they are talking about. Of course, he (Don) also made that statement about fica that baffles me.
Is there anyone that actually knows the regulatory reasons why some firms are offering prop w/o licenses?
Is there anyone that actually knows the regulatory reasons why some firms are offering prop w/o licenses?
Quote from Don Bright:
Hmmm? Assent, RBCarlin, Echo, Bright, Schoney, and the exchange members still require S7. Some may have a "retail wing" if they want the NASD hassles, not sure.
With ARCA/NYSE the Specialist concerns are no longer. No more Specialist fees for orders over 5 minutes, etc. Things change, we adapt.
FWIW, the "Continuing Education" is first 2 years away, then 3 years after that, and you "cannot" fail, they just keep asking the same questions until you get them right, LOL.
Anyway, I have the best Compliance Officer in the business (Hi Diane, LOL)...and if she thought we could eliminate the S7 requirement, she would tell me.
All the best, good discussion!
Don
It's being done and has been done for at least 2 years. I know some sub-LLCs that were doing it for like 5 years. Many large "prop" firms offer both options.
No matter how easy it is, Continuing Ed is a waste of the individual's time. And the NASD hassles seem to come with being S7 licensed from what I remember.
Quote from archipus:
We now have several people saying that s7, etc is not necessary, and the head of one firm saying he doesn't know what they are talking about. Of course, he (Don) also made that statement about fica that baffles me.
Is there anyone that actually knows the regulatory reasons why some firms are offering prop w/o licenses?
Our traders are exempt from FICA (Self Employment Taxes), I can answer that with no problem, LOL. I do know that the CBOE has a couple of firms that do not require S7, but the stock exchanges do...things will likely change to where everyone will need a S7, IMO.
There are "daytrading" firms that simply put some cash into one big account and let the traders use over 4 to 1, but, for the most part, these are not registered firms. There is a big difference between what is "legal" and what "can" be done, IMO. (No "cards and letters" I'm not referring to any particular firm, or implying that anyone is breaking any securities laws, just an observation).
Maybe Lescor could kick in about how Tuco is set up if he wants to?
Don
Quote from Hydroblunt:
It's being done and has been done for at least 2 years. I know some sub-LLCs that were doing it for like 5 years. Many large "prop" firms offer both options.
No matter how easy it is, Continuing Ed is a waste of the individual's time. And the NASD hassles seem to come with being S7 licensed from what I remember.
Yeah, we haven't bothered joining the NASD, a lot of extra costs and paperwork. They do take care of the exams, however.
Don