membership of broker?
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membership of broker? I think there is a restriction about having a member who is a stock broker, as I am trifling I would like to know the answer from y'll without doing a lot of research. The potential members should know the answer. It could be a restriction in their employment. I think there is a restriction about having a member who is There are no outright legal restrictions preventing a licensed stockbroker or other professional, financial or otherwise, from joining an investment club unless the partnership makes up their own rules that prevent professionals from joining. If a broker genuinely participates like any other member--joint decision-making, no special access or authority--the club still qualifies for exemptions from SEC regulations. However, if the broker is paid or takes a lead role in recommending investments, they may legally be acting as an investment adviser--which typically requires SEC or state registration. The broker can get themselves into trouble however. FINRA rules apply to broker conduct in personal accounts--including investment club accounts if they control trading or have beneficial interests And they have to be careful about selling away, i.e., suggesting or facilitating private securities transactions within the club without firm approval--this can violate firm policy and regulatory rules. But that's their problem, not the club's. I am not a CPA or a lawyer. Lucile, A person working in the industry often creates compliance challenges. The individual would have to provide specifics and review the participation with their compliance officer. The Mutual Investment Club of Detroit faced this issue and decided to avoid the complications and "special" reporting requirements and restrictions. Mark Robertson I think there is a restriction about having a member who is Adding to the other replies, the individual's compliance department may impose several restrictions - all trading must be done through the individual's employer, trades need to be pre-approved by the compliance department, and there may be blackout periods (typically before and after earnings announcements). Ira Smilovitz
Thanks to everyone, that's what I thought. We don't need the complication.
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