This Forum overtrades options
- Thread starter bwolinsky
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It's generally accepted that solicitation does not even require registration, and I qualify in every state under de minimus except Kentucky, so this is not an issue. I am also not a broker dealer so SIPC doesn't apply, and I am registered with Finra providing general advice as it relates to managing investments.
For further detail, see the other explanation I've provided and see if that doesn't help.
That man doesn't know what he's doing.
Again, de minimus. I am almost completely done with the approval process.
That was general advice in a public forum. I can accept clients everywhere until I need to worry about de minimus crossing over the 5 client mark in each state, and I'm just a startup.
Advice is "Buy 5 DOW CFD's tomorrow because I know you lost too much money or $5,000 so this should rebound" if directed at a specific individual and there's no verbiage like that. There's nothing that qualifies as advice because there isn't "an offer to sell/buy." Merely asking somebody to let me manage your money does not constitute advice.
Making calls in a public forum is also not individualized advice and falls under the same parameters as newspaper, subscriptions, C2 rules, and the like.
You can see a great explanation of these rules on C2.
Solicitation is also acceptable nationally as I am a CTA. This does not have de minimus rules because it is a nationally recognized designation.
BC1: there has to be individualized advice that analyzes somebody's situation and an offer to sell for it to be considered advice. Since I don't know his situation, and I haven't told anyone in particular what to do with their money, none of that is advice, even the solicitation. I've advertised in states I'd like to acquire clients from, and as far as that is concerned, it's every state and foreign people, too.
As a CTA anyway, I can only accept Accredited Investors, and that really throws a lot of things out the door with respect to what I can say, because presumably the SEC assumes that these are much more sophisticated investors who understand anything they might invest in.
I am an accredited investor by virtue of the fact that I'm a licensed RIA who owns a stock exchange seeking to file reg-d's and underwriting securities for those investors.
Anyone who is not an accredited investor is not my target audience for my CTA, but they can invest in my RIA through Covestor or by contacting me directly to manage their money, and only after they've moved their money and granted me trading access this is the limit to what I have to do under the limited discretionary authority I have to place trades on behalf of the client.
I hope you've now learned how to recognize the difference between solicitation, asking to manage money, and advice, telling someone individually that you recommend something rather than general advice or forum posts here of market calls I'm making.
Since none of that is directed at anyone in particular this does not constitute advice under FINRA or NFA rules, and does not require registration as a broker/dealer.
As a newly established RIA I can solicit to whoever I want, as long as the recommendations are understood to be following an analysis of somebody's personal situation with recommendations explicitly stating "You should buy XYZ because you are 5 years from retirement" when you can acceptably say in public to nobody in particular "I think you should definitely sell here, and possibly go short." That's not individualized advice and as far as that goes, any other analysis the NFA and Kentucky Securities Regulators has done has found that all of my communications pass compliance.
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