AFS Licence Needed Or Not?

[mofotrader]

Hi,

I am currently going to be trading for other clients in their own name through a Family and Advisors Account on Interactive Brokers. The account will be opened up in my name and the sub accounts will be in the name of the Clients/corporate entity (so can trade margin).

Now on ASIC they mention you generally need an AFS licence if you deal in a financial product for example, buying or selling shares on behalf of a client or issuing interests in a managed investment scheme.

Now if i am trading my signals and shares through the clients name and account is this OK and no need for an AFS licence?

Is there anyone else here who does this and has any advise for me ? much appreciated Thanks

 

[Richard Dale]

Now on ASIC they mention you generally need an AFS licence ... for example, buying or selling shares on behalf of a client

Now if i am trading my signals and shares through the clients name and account is this OK and no need for an AFS licence?

With all due respect, I think you answered your own question.

 

[mofotrader]

Haha Thanks, yeh i guess i did. I will def be talking to a Finance Lawyer to clarify a few things. Just a bit silly having to have a $25,000 Licence to be able to talk about stocks and trade for a family member. I mean if you're talking to friends at a dinner about shares and you don't have a Licence could you be done for fraud ?

 

[Richard Dale]

Talking about stocks at a dinner party (or on a forum) does not require you to have an AFS licence unless you are in the business of providing financial advice or trade financial products on behalf of others etc.

http://asic.gov.au/for-finance-professionals/afs-licensees/do-you-need-an-afs-licence/

A "$25000 AFS Licence" would be very cheap - although you some AFSL holders do have schemes whereby your operations can be included in theirs (for a fee).

 

[pixel]

Haha Thanks, yeh i guess i did. I will def be talking to a Finance Lawyer to clarify a few things. Just a bit silly having to have a $25,000 Licence to be able to talk about stocks and trade for a family member. I mean if you're talking to friends at a dinner about shares and you don't have a Licence could you be done for fraud ?

If it stays in the family, have you considered setting up a Family Trust?
Trustees don't usually need a license. Of course, they need to trust each other and continue doing so ...

 

[mofotrader]

Thanks i have been having a look around for some AFSL holders who do offer schemes. Are you able to recommend any to have a look at ?


Do many retail traders/signal services/platform software companies etc do away with Licences and use disclaimers instead to advise they are in no way in the business of giving trading advise and the client is fully responsible for him/herself ?

 

[mofotrader]

If it stays in the family, have you considered setting up a Family Trust?
Trustees don't usually need a license. Of course, they need to trust each other and continue doing so ...

Thanks for the advise. I know to be able to trade margin with IB you have to have a company or a corporate trust. However,,, If you are opening a family and friends advisors account (minimum of 15 clients and Under 30M). you have 2 choices with the structure: open it in an individual name OR if you open it in a trust/ company: you need a Licence. I was talking to Ib accounts support yesterday, he mention no one has tried to open an advisors account in a trust but was adamant it would be investigated by ASIC.

If you are wanting to trade your own account, open another in a corporate trust OR company and operate the Advisors account in your own name and have your clients open their accounts in a corporate trustee.