Do you need a Series 65 to run your own hedge fund?
Beginners · Video 10 of 12 · 0:44 ·
It depends on whether you have to register as an investment adviser. If your state requires registration, the people giving advice generally must pass an exam such as the Series 65. Many states exempt small private fund managers, and exempt managers often need no exam, though some states differ. The Series 7 is a broker's license; raising money for your own fund usually doesn't require it. What makes the fund itself legal is its exemptions: one for the offering, one for the fund, and your adviser status.
Everything here is for educational purposes only and is not legal, tax or investment advice, or an offer to buy or sell any security. Laws and thresholds change and depend on your facts, so talk to a qualified attorney before acting.
Key facts
- State-registered advisers' representatives generally must pass an exam such as the Series 65.
- Many states exempt small private fund advisers; exempt advisers often need no exam.
- Requirements vary by state, so check your state's rules.
- The Series 7 is a broker license; issuer personnel selling their own fund usually don't need broker registration.
- A fund relies on exemptions (offering, Investment Company Act, adviser status), not on a license.
Transcript
Founder: Everyone says I need a Series 65 before I can run a fund.
Operator: Maybe. It depends on one question: do you have to register as an adviser?
Operator: If your state requires you to register, the people giving advice usually have to pass an exam, like the Series 65.
Founder: And if I'm exempt?
Operator: Many states exempt small private fund managers. Then there's often no exam at all. Some states still want one, so check yours.
Founder: What about the Series 7?
Operator: That's a broker's license, for selling securities for others. Raising money for your own fund usually doesn't need it.
Operator: And a license isn't what makes your fund legal. Exemptions are: one for the offering, one for the fund, and your adviser status.
Founder: So the exam isn't step one.
Operator: Your state's rules are.
Founder: So everyone says I need a Series 65...