In some jurisdictions, such as the US, the laws allowing for private trading seem to be less clear. As with many complex topics, there are plenty of differing opinions within the industry.
The Securities and Exchange Commission (SEC), for example, released a report in 2014 outlining its stance on private trading with institutional clients.
However, SEC’s views on its jurisdiction is very unclear, meaning that, “for the most part, investors cannot trade with firms without going through an intermediary.”
This is where you come in.
We understand that the SEC doesn’t want to see you trading with the private equity firm you recently sold your shares in…
We would also like to remind you that although we are an accredited broker & dealer, we are not an investment adviser (see how that works?). That means that we are regulated by the SEC only on matters relating to investment accounts. You will not be able to invest directly with us through your investment account (which is why it is important for most people to work directly with us in the first place), nor will you be able to purchase your investments directly from us. (See how that works on our home page).
The SEC doesn’t want you to trade with the private equity firm you recently sold your shares in
When you have sold your shares in the private equity firm, we will issue a statement of cancellation, meaning that you no longer own shares in the firm.
However, under certain circumstances, you may be able to retain the share you sold to the private equity firm – which could be one reason why you decide to trade with us instead.
If you did sell shares from the former private equity firm, you may have a right to “cash out” of the firm at the end of the sale.
How much can I trade with private equity firms?
Our brokerage has no maximum amount you are permitted to participate, but it’s certainly possible to participate with larger firms.
It is worth noting that the amount listed as the value of shares on your brokerage account is for investors who own their shares through their brokerage account, and not for investment advice or trades made on our behalf.
For example, most brokers will charge 0.50% or less per trade on average for trading with a private equity firm if the firm offers a commission arrangement such as commission trading, or if the total traded amount during a single day equals the average commissions that other brokers charge.
Therefore, even on the biggest
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