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I was going to stay out of this, but it is now out of hand. You'all are
drifting back and forth between SEC and CFTC regs.
As I recall, Securities Brokers need to be registered in each state they do
business, and many states now charge a fee to be registered in their state.
I think this gives each State AG the hammer on bad stock brokers.
CFTC (futures) regs are a whole different deal. There is no state
registration requirement for futures brokers.
CFTC is authorized by congress.
The CEA (Commodities Exchange Act) of 1980something stipulates that all
exchanges, AP's, etc be a member of a Self-Regulatory organization. To date,
there is only one self regulatory organization, the NFA. (As a side note, I
find it interesting that congress stipulates that we be a member of the NFA,
which we fund ourselves through NFA fees. But,,, each time a budget bill
comes up some genious decides we should also fund the CFTC through
transaction fees. Think about it.)
And finally, to the original question. The owner of a futures account can
grant a limited power of attorney to anyone. This means the person can place
orders on behalf of the account, but he can not order money sent out of the
account. A person who has POA over a futures account and is not registered
as a CTA must sign a form which in laymens terms says:
1) He has not spoken to more than 12 people in the last 15 months about
futures ( I may have the numbers transposed)
2) He does not recieve any compensation for any of his services.
3) He does not represent himself to the public as being in the business of
trading futures.
I've got a memo in my desk somewhere which is a NFA or CFTC interpretation
of these item's. In Brief, since nobody but your family would know that you
trade futures, the only accounts you can receive trading authority over are
family accounts.
Sooooo, back to the original question in this thread: Yes, you can trade a
family members account if the account owner signs a Ltd power of attorney to
you and you do not charge for your services and you never tell a soul that
you trade futures.
To have trading authority over anyone else's account you need to be a CTA.
Having said all this, I have found that each FCM has their own policy on
this matter.
(I'm writing this from memory so don't get too picky)
Cheers
Kevin
Alan M. Abraham wrote:
>
>Gary,
>
>The CFTC was chartered by the US Congress. It formulated the NFA. Each
>has separate functions. Thier rules and regulations are FEDERAL and
>therefore superceed all state regulations. In fact, most of the states
>get into the act so they can collect a state license fee from brokers who
>live in thier state, and increase thier revenue. I use to pay about $80
>a yr. to Ca. for no reason I could figure. If you follow the federal
>regulations you will most likely be ok. The information number for the
>NFA is: (800)621-3570. AMA
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