Trading for a hedge fund

Veegan · Post by **Veegan** » Wed Nov 21, 2007 12:23 pm

I have a quick question regarding trading within hedge funds. Is there a legal requirement for a novice trader to have any regulatory certificates or qualifications (e.g. IMC, FSA etc) before trading for the hedge fund? What is normal practice is this regard?

Thanks,

V.

Jaxx · Post by **Jaxx** » Wed Nov 21, 2007 1:09 pm

kronon · Post by **kronon** » Wed Nov 21, 2007 1:24 pm

From what I know, hedge funds dont have specifically prescribed minimum qualifications, but they are obligated to make sure training is appropriate for basic competency. So to cover themselves most firms (in the UK) would want an IMC and a relevant Securities Certificate (Eg Derivatives) as a minimum.

This is an area the regulators dont ask much about until something goes wrong: "Dont you think the trader that blew your fund up should of had more training than A-levels in woodwork?"

FDAXHunter · Post by **FDAXHunter** » Wed Nov 21, 2007 3:50 pm

It depends where specifically where the manager of the hedge fund is managed and controlled from and regulated by. There are certainly jurisdictions where the investment manager is not regulated at all. It's even possible to manage a hedge fund from the shores of the United Kingdom without being regulated at all (alas, this brings some very unfortunate tax consequences with it....).

In the UK. as kronon has said, hedge fund traders don't specifically need to be certified (as long as someone within the firm is regulated and is willing to take responsibility for the trader). It's good practice to have some kind of napkin to wave around ("See, I'm qualified!").

Either way, you shouldn't need it right from the start.

Veegan · Post by **Veegan** » Mon Nov 26, 2007 10:27 am

Good morning Chaps,

Thanks for the information.

Best,

V.

Kutilya · Post by **Kutilya** » Mon Nov 26, 2007 8:52 pm

From past practise observed in London a firm normally has about 2 years to get a new fund manager IMC’ed without compliance and FSA having issues. Get it out of the way ASAP, it becomes an annoyance as you get busier.

Nonius · Post by **Nonius** » Fri Nov 30, 2007 10:05 pm

a UK domiciled investment manager of a hedge fund doesn't need to be registered with the FSA. many register, however. same deal in the US with the SEC. even if a manager is registered with the FSA, it doesn't mean every employee, even if that employee is "trading", needs to be registered.

anyway, there are millions of ways of circumventing registration, if that's what the partners want to do for a pile of employees. partners' motivations for this usually are related to capital requirements. one strategy is to have one company, say, called Nonius Capital Management Ltd. (the investment manager), an FSA registered company, that is owned by Nonius Group, Ltd. Cayman (the manager), which also owns NoniusResearch Ltd UK, a "research" company with employees such as Veegan, who's brilliant but who just got out of jail where he served a sentence for defrauding millions of young men on a snuff-film pornography ponzi scheme.