Those firms are registered with the SEC. But they chose to be regulated by the CBOE, not FINRA. They are referred to as "non-FINRA BD's" and are perfectly legal as long as they don't interact or solicit with the public.
Warning to anyone trading through an LLC
- Thread starter t0pd0g
- Start date
The firm is registered. Then how come the traders are not registered? How do the traders get to bypass taking all the required securities licenses? 7,55,63? Is the firm only one required to register and not the traders?
Those firms are registered with the SEC. But they chose to be regulated by the CBOE, not FINRA. They are referred to as "non-FINRA BD's" and are perfectly legal as long as they don't interact or solicit with the public.
Quote from bulllives:
what about Prop firms opening LLC sub accounts thru CBOE firms? Are they really registered with the SEC that way? Or is this just another loophole to bypass FINRA registration?
Those firms are registered with the SEC. But they chose to be regulated by the CBOE, not FINRA. They are referred to as "non-FINRA BD's" and are perfectly legal as long as they don't interact or solicit with the public.
Quote from bulllives:
what about Prop firms opening LLC sub accounts thru CBOE firms? Are they really registered with the SEC that way? Or is this just another loophole to bypass FINRA registration?
The SEC doesn't require the licenses, FINRA does. Since they are non-FINRA BD's, FINRA does not regulate them. The CBSX is their regulator and currently the CBSX doesn't require a series 7. The Philly Exchange also regulates firms that trade on the PHLX, for example, and also has different rules than FINRA firms.
Did any of the individual traders lose money, aside from their own bad trades?
Ideally. But the public has the ultimate put here - rioting. Once you reach a critical mass of people that get hurt badly enough and have nothing to lose, all bets are off. And that public is neither rational nor mature - they are for the most part short-sighted idiots that will happily bury themselves if you give them a shovel.
The financial industry is out to screw as many people as possible, and those that are dumb enough to fall for it deserve to get screwed. That's fine, as long as the number of people screwed is manageable. The problem with the greenspan years is that they let the industry go wild - instead of being satisfied just shearing the sheep, they slaughtered them, then raped the farmer's wife and burned down the farm.
Expect continued political response, both in the form of a bit of reactionary regulation and much more in the form of power-grabbing and abuse allowed by the political capital they now have.
Ah... when the uninformed and ignorant make recommendations.
FINRA is a merger between NASD and NYSE.
NASD is a division of NASDAQ - an exchange, and so is the NYSE
they are called SROs - SELF regulated bodies.
Besides these, there are others. Chicago is one of them.
Some SROs require licenses, some don't.
Few years back, if your b/d was registered with NASD, you needed a S55 to trade.
If it was with NYSE, you didn't need it.
So when you switched from a NASD to a NYSE shop, the S55 didn't transfer.
Did that make NYSE worse then NASD?
No.
Same with other SROs
SEC registration is required for public companies.
I've lived in 14 countries and it's the same shit, everyone wants to crap on good ole USA. Well the US isn't about socialist majority it's about freedom. It's not about protecting asian interests, sell your f'n bonds and stick to asia we don't want to hear about it. We bitch because we're a Republic and we defend our constitutional rights on which America stands. We're Americans and it's our business, you can be a silent investor but other than that we don't care how you think we should conduct ourselves.
I bet this "Prop" Firm does not traders to have a Series 7.