Hey here's what I found so far. First, I'm pasting below a message regarding lack of NASDAQ Index funds and secondly, another message on all the steps required in starting your own fund (costs too much $$$).
1. You need to be a Registered Investment Advisor (easy). Cost $125 for life with the SEC. Most states also require state registration. As a quirk California exempts registration if your only client is a mutual fund.
2. Form a trust or corporation. Register in your state (or Delaware) as an "manangement investment company".
3. Write prospectus. File it and N-SAR with SEC. File N-1 (?? rusty memory here) with SEC.
4. File U-1s and pay fees in the states in which you intend to sell shares. Blue Sky Laws apply here.
5. Form a board which meets SEC regs on insiders vs. disinterested directors.
6. Write bylaws and organizational resolutions (very effort intensive, about 24 technical items must be addresses, ethics, performance benchmarks, fees, compensation,).
7. Get $100,000 in seed capital.
8. Wait for "effective" date of N-SAR with SEC.
9. Get a broker-dealer to be your distributor. Has to be registered in states in which you sell shares. Arizona is a bitch.
10. Get a fund accountant, an auditor, a custodian, a shareholder servicing agent, a transfer agent. You can do these tasks or contract them. Nearly all funds contract them.
11. Register with NASDAQ for a trading symbol, 5 letters ending in X but notXX.
12. Do initial offering to public and invest proceeds. If you are no load, you are screwed since no brokers will help sell you funds. You are on you own. Consider starting as a load fund and dropping the load (and brokers) when you pass $30 million in assets.
13. Calculate daily NAV and pay an agent to put it on the NASDAQ wire daily. That's 95% of the work.
This all costs about $30,000 to $100,000 to start up and then about $80,000 in annual
costs. Until you have $30,000,000 expect to lose money. If you have never sold intangibles (stocks, cemetary plots, insurance, etc.) better think twice. A performance record is not a sufficient reason people will invest in your fund. You must have an "edge."
If you are still interested, email me for the names of people who can help on this process.
Bill Ragsdale
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tulipmaniac@netconductor.com netconductor.com |
