Forex Industry

Starting a Forex Hedge Fund

A Forex fund can be established in many countries around the globe, without even having to visit them..Starting a Forex Fund

While Forex brokers, money managers, and liquidity providers are under heavy regulatory pressure in recent years, the number of Forex funds around the world is constantly growing as a result of an expanding demand for passive-Forex investing services.

 

Setting-Up the Forex Fund -location

A Forex fund can be established in many countries around the globe, without even having to visit them.  You can easily start a Forex fund in the US, in Europe, or even in offshore countries. The United States provides a huge pool of potential investors and a straightforward legal framework for building your Forex Fund, nevertheless, a specialized legal advisor is always needed. As concerns offshore funds, the British Virgin Islands may be the best choice. Note that offshore countries offer tax advantages, however, they are not the best choice for small-sized funds.

 

Legal Requirements and Time

The best way to start a Forex fund is by using two separate business entities:

□ A limited partnership for the Forex fund itself

□ A separate limited partnership that manages the funds

Starting a forex Fund requires a legal advisor who is experienced in preparing the needed documents. In the US, the required documents include:

  • the PPM (private placement memorandum)
  • fund's limited partnership agreement
  • the subscription agreement

Other legal documents may include:

  • Anti-Money Laundering
  • Know-Your-Customer
  • Disaster/Data Loss policy

Furthermore, there is a requirement for:

  • bank account
  • brokerage account
  • Investor Pitch Deck (a presentation that provides an overview of the fund’s structure and other information)

Setting up a Forex fund in a Western country typically needs between 2 and 4 weeks, however, setting up an offshore Forex fund, can prove faster.

Institutional Forex

The Forex market consists many different categories of participants (Central Banks, Commercial Banks, Large Corporations, Retail Traders, Institutional Traders, etc.)

Institutional Forex Trading

The Forex market consists of many different categories of participants (Central Banks, Commercial Banks, Large Corporations, Retail Traders, Institutional Traders, etc.)

When we refer to institutional traders we are referring to Interbank Traders such is Banks and Large Investment Firms. Institutional Traders enjoy several advantages over retail traders when trading the Foreign Exchange. These advantages are in terms of lower trading costs (spreads) but sometimes also in terms of better information.

 

Institutional Forex Trading Features

These are some of the special features of the Institutional Forex Trading:

(1) Liquidity directly from Tier-Banks and Proprietary Trading Firms

(2) Best Rates Identification Mechanism

(3) Open order book / Full market depth

(2) Complete anonymity

(3) Low-latency order-execution

(4) The existence of complicated orders

(5) Pre-trade and post-trade transparency

(6) Fast Execution (High-Frequency Trading and low-latency order processing)

 

 

Institutional Forex Platforms

Institutional Forex Trading Platforms include MT4, Thomson Reuters, Barclays BARX, Orex, and some others. These platforms use a fully customizable interface, advanced and integrated charting plus advanced order execution.

(1) Barclays BARX

(2) Thomson Reuters Fx Matching

Welcome Aboard

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