FSA Approval for signal service

Trading Discussion
1

Hello,

I have been stuck with a problem that I hope other signal service providers may be able to help me with. Could you give me some advice, or at least point me in the right direction?

For our own use, we have developed a computer program that buys and sells
foreign exchange.

We’d like use this program to offer a commercial ‘signal service’ . An alternative model could be to act as an introducing broker to obtain a commission based upon trades that clients execute through the program.

Subscribers could be anywhere in the world. However, we are UK-based.

I’ve spoken with the FSA and tried to make sense of the PERG handbook, especially 2.5.4. But, I remain unclear whether a computer program issuing buy/sell instructions constitutes “investment services and activities”.

For the kind of activities outlined, do we need to become FSA registered?
Are there any related issues that you can bring to my attention?

Thanks in advance.
Dave

2

Hello, Dave

You may already know something about Babypips.com, the Babypips forums, and the membership here.

But, if you don’t, let me tell you that, generally, we are small, retail traders who are consumers of forex services, not providers of forex services.

Therefore, this forum is probably not the place to be seeking legal advice regarding financial regulation of forex signal providers in the U.K.

If you want a purely amateur opinion, here’s mine:

There are lots of forex signal services out there. You probably consider them to be your competitors, to some degree; and,
I presume, like all businessmen, you study your competitors closely.

If other U.K.-based firms are already in the business of selling forex trading signals, and IF registration with the FSA is required, then this would be apparent in the Required Disclaimers and other fine print appearing at the bottom of their websites, email advertising, and signal dispatches.

Also, if you have the name of an existing U.K.-based signal provider, it surely must be possible to find out from the FSA whether they are FSA-registered and, if so, the exact regulations applicable to them.

That’s where I would look.