Registered Investment Advisor
- Thread starter shorty_mcshort
- Start date
Shorty,
As long as you are not receiving commission for the trades you place, I do not believe you will be required to have Series 7 or be associated with a BD. You should also be able to use IB as custodian for your accounts. Technically they will be the broker.
If your only intention is to charge a fee for your services a Series 66 should cover you. I suggest the 66 because it is a combination of the 63 (mainly covers state law) & the 65 (law, regulations & ethics).
You will probably need a Series 24 as wellâ¦.it is a supervisory license.
Check out these links:
http://www.nasaa.org/industry___regulatory_resources/investment_advisers/456.cfm
http://www.nasaa.org/industry___regulatory_resources/investment_advisers/445.cfm#1
I suggest calling your states securities regulatorâ¦most are very helpful.
BYF
If you want to go the 2/20 route (and who wouldn't), you'll likely have to become a hedge fund.. and may(?) be excluded from RIA registration
If you manage an incubator fund trading stock only:
1. If AUM is less than 30M (or 25M), do you need to register with State as an RIA?
2. If AUM is more than 30M (or 25M), do you need to register with SEC as an RIA?
I understand that is you manage individual accounts (instead of incubtor fund or hedge fund), the answer to question 1/2 above is yes. But not sure if it is an incubator fund or a micro hedge fund.
If you meet the requirements of a hedge fund, I believe you don't have to register.
If you don't meet the requirements of a hedge fund, then "yes" to each of the above.... assuming you are receiving some form of compensation. In addition, if you earn revenue from commissions, you'd also have to be registered with the NASD as a RR. And if any one of your investment activities are required to be registered with the NASD, then ALL of your business activities are subject to NASD regulation.
Quote from gnome:
You can charge a "performance fee" only to Accredited Investors... and based upon a minimum of 12 months experience. That is, if you have good 1st and 2nd quarter, you still can't charge a management fee yet (you might give back the gains in the 2nd half of the year).
If you want to go the 2/20 route (and who wouldn't), you'll likely have to become a hedge fund.. and may(?) be excluded from RIA registration.
Could be my info on this is out of date.. if somebody knows differently, please chime in.. (like you'd NEED an invitation...)
WRONG!!!!!!!! Under Reg D, you can take in 35 non-accredited's (they have to be "sophisticated" Investors.), and the rest have to be Accredited.
Second, you can debit their accounts MONTHLY as spelled out in the PPM. It's all according to how you have your PPM (Private Placement Memorandum worded, and that the Clients have FULL DISCLOSURE that they're being billed monthly.)
I have been an independent trader for the last 10+years and am considering the RIA route. I have been doing a fair amount of research. Let me post of a few statements of my understanding of what an RIA can do. Please feel free to comment or correct me.
1.RIA registered with state <$25M. >$30 SEC. Letter of notice to states outside principle place of business based on # of clients in that state.
2.Series 65
3.My intent is to trade through IB as I do now as an independent and work fee based. Since IB will be the custodian, back office reporting will be IB's responsibility and my customers will just pay the advertised commissions to IB and a management fee to me.
4.I can wok on a discretionary or non discretionary basis. For the discretionary case, I will basically be an authorized trader for the account. Compliance will be that I am operating and trading under the guidelines established in my customer agreement with my clients.
5.I can trade stocks, stock & index options, mutuals, etfs and bonds in their account.
This my basic understanding of what I can do as a series 65 RIA.
Here are a couple of add on questions.
If I want to use futures in their accounts, what licensing do I need? Specifically VIX futures as there are used in my hedging model. Yes I know that I can replicate them with CBOE options but I just want to know my options.
What insurance are you carrying other that O&E?
What options exist for performance compensation?
Thanks for your time
1.RIA registered with state <$25M. >$30 SEC. Letter of notice to states outside principle place of business based on # of clients in that state.
2.Series 65
3.My intent is to trade through IB as I do now as an independent and work fee based. Since IB will be the custodian, back office reporting will be IB's responsibility and my customers will just pay the advertised commissions to IB and a management fee to me.
4.I can wok on a discretionary or non discretionary basis. For the discretionary case, I will basically be an authorized trader for the account. Compliance will be that I am operating and trading under the guidelines established in my customer agreement with my clients.
5.I can trade stocks, stock & index options, mutuals, etfs and bonds in their account.
This my basic understanding of what I can do as a series 65 RIA.
Here are a couple of add on questions.
If I want to use futures in their accounts, what licensing do I need? Specifically VIX futures as there are used in my hedging model. Yes I know that I can replicate them with CBOE options but I just want to know my options.
What insurance are you carrying other that O&E?
What options exist for performance compensation?
Thanks for your time