Collective Investment Scheme in stocks and futures trading?

#1
Collective investment schemes or money pooling got bad reputation because of frauds and cheating by promotors and investing from plantations to scrupulus businesses. SEBI came down heavily on such schemes.
What if I with my 6-10 other friends form an LLP, pool money together(upto 1 crore) and do stocks, options and futures trading under name of LLP.
I as active trader can take 10% of profits(not assets) made, other partners can share remaining profits. This is known as 'hedge funds' in western world.
What is best way to get this started as investment club? LLP? Do I need any special registration? There is very little info about this particular route on SEBI site.
Thanks
 

NJ23

Well-Known Member
#2
Collective investment schemes or money pooling got bad reputation because of frauds and cheating by promotors and investing from plantations to scrupulus businesses. SEBI came down heavily on such schemes.
What if I with my 6-10 other friends form an LLP, pool money together(upto 1 crore) and do stocks, options and futures trading under name of LLP.
I as active trader can take 10% of profits(not assets) made, other partners can share remaining profits. This is known as 'hedge funds' in western world.
What is best way to get this started as investment club? LLP? Do I need any special registration? There is very little info about this particular route on SEBI site.
Thanks
https://www.quora.com/What-is-it-like-to-make-millions-trading/answers/12302928

The answer is entertaining but the author of the answer answers queries in the comments.

LLP is LLP, I don't think you'd need any registration at SEBI.
 

wisp

Well-Known Member
#3
https://www.quora.com/What-is-it-like-to-make-millions-trading/answers/12302928

The answer is entertaining but the author of the answer answers queries in the comments.

LLP is LLP, I don't think you'd need any registration at SEBI.
The story of the woman in Bangalore makes an interesting read, but not sure if true....sounds like and advertisement to catch people with all those of photos of various places :D dunno

copied images https://www.tineye.com/search/f0a3760bfc4b00dfe01eb45f9a9af0d07bf6a463/
 
Last edited:

Tejas Khoday

Co-Founder & CEO, FYERS
#4
In 2013, I flirted with the idea of starting a pooled investment fund. I have consulted with some of the most well-reputed auditing firms in Bangalore and discussed the possible ways about taking it forward. I ended up spending a bomb on consultations but getting the right legal advice was crucial to me at the time as I did not want to start on the wrong foot. Believe me, there are a lot of restrictions, risks, and complications when it comes to managing a pooled investment scheme without being an AIF or AMC.

Many ambitious traders often get caught in this puzzle and since they don't want to overthink it, they are more focused on getting started and ignoring the regulatory aspects completely. Fortunately, the homework that I did a few years ago has helped me stay away from some of the common practices by sub-brokers / APs with dealing terminals in India. I have helped people with my advice on the most suitable structures depending on their requirements.

Please remember, in finance being compliant pays dividends in the long-run. If you are considering something and need my opinion, feel free to send me a message.

P.S - I saw this thread as it popped up on my screen. Just realized that it is 4 years old.
 

Yadeyo

New Member
#5
Tejas, it doesn’t matter if this post is 4 years old, I think that question is very good I was also thinking in this direction, but it seems that there is no way to switch hedge fund into LLP. Regulators are definitely not some naive people and it would be good to stick with regulation
 

vagar11

Well-Known Member
#6

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