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Regulatory Hosting for aspiring Appointed Representatives, Fund Managers and Traders

 

Background:  Starmark was established in 1998.  In 2005, Starmark Investment Management Limited (SIML) (previously Starmark Trading Limited) (FRN 190249) received authorisation from the Financial Services Authority, now the Financial Conduct Authority (FCA), to engage in investment management business. Since then, SIML has engaged in broking and fund management activities, has acted as Investment Manager for a number of offshore funds and established a regulatory hosting platform.

Why use a regulatory host?

--  Hosting is not as costly as obtaining your own regulatory license.

--  It can take 9 to 12 months to go through the process to obtain your own license, as opposed to around 2 months to achieve regulatory coverage as an AR. 

--  While under the host's umbrella you can still manage your own business.

-- The host manages your regulatory risk and any necessary transaction reporting (if individuals are seconded to the host for fund management).

Why choose STARMARK as your regulatory host?

--SIML has been operating as a regulatory host for Appointed Representatives and fund managers for over 10 years.

--We have developed an in depth understanding of FCA rules and regulations and are well placed to ensure that you meet all of your regulatory obligations.

--Each member of SIML's management team has been working in the financial services industry for over 25 years.

--We recognise that regulatory costs can be a big issue for start-up operations which often expect to have only a few million to manage in the early days, so we offer a very competitive pricing arrangement to try to reduce the pain. We believe that we can do this by strictly controlling our own costs and avoiding trying to be all things to all people. The larger umbrella companies, which mostly cover the whole range of clients including retail, need to cover higher operating costs and regulatory risks associated with retail. We have decided to avoid the retail market and deal only with professional clients and eligible counterparties. 

--We requires all candidates, who seek to engage in regulated activity, to undertake regular online training in regulatory compliance.

--We arrange for all candidates to obtain the appropriate FCA permissions to engage in their relevant regulated activity.This involves obtaining the FCA's CF1 (AR) (director) and CF30 (customer) controlled functions for the AR through the Approved Persons Regime, and Certification status under the  Senior Managers & Certification Regime (SMCR) for those wishing to engage in fund management. ARs may not trade, so trading is done in the name of the authorised entity SIML with the AR acting as trading advisor.  

--All marketing, under Starmark's supervision to ensure regulatory compliance, can be done in your own company's name as an AR of Starmark.

--Over the years SIML has developed a close relationship with Ifina, a global fund administration company. Ifina focuses on the smaller start-up funds, dealing only with professional clients. They offer very competitive pricing and the full range of administration services across many jurisdictions. We currently act as investment manager for several funds administered by Ifina in the Cayman Islands and have previously worked with them in the BVI.

--We have introduced a new structure, which Starmark has developed, and which has been designed to allow unregulated proprietary trader clients to utilise Starmark’s regulatory permissions through a managed account structure, without the clients themselves needing to be regulated.

Diagram of SIML managed account and fund structures here

The scope of SIML’s activities can be viewed on the FCA Register under reference number 190249. As indicated earlier, SIML deals only with professional clients and eligible counterparties and is not authorised to hold client funds.

If you are contemplating starting up a business as an Appointed Representative and/or in fund management please get in touch.

 

Eldon Kerr       ekerr@starmark.biz , or

Allan Kerr        akerr@starmark.biz

What is an appointed representative?
 

An appointed representative is a firm that conducts regulated business under the umbrella of an FCA authorised firm, which acts as its ‘principal’. The principal firm takes regulatory responsibility for the appointed representative, and must ensure that the AR abides by all FCA Rules and its Code of Conduct. ARs must understand and comply with the regulatory requirements relating to their business.  The principal firm must be allowed access to staff, premises and records so that they can carry out their regulatory responsibility to monitor AR activities.

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