Starting the Hedge Fund Application & SMA Applications

Study Notes:

Once the master Hedge Fund Advisor (HFA) or Fund Manager (FM) account has been approved by compliance and opened, the Fund Manager can initiate applications for the sub-trading accounts. As a reminder, the master Fund Manager account cannot hold any positions itself, and instead is used to trade on behalf of the accounts underneath its structure.

If the sub-hedge fund account application was not already initiated while the master account application was under compliance review, then the Fund Manager can initiate the application from the Hedge Fund Portal home page by clicking the blue Add Account button, followed by Hedge Fund Client Account.

On the following page, there are 2 different application types:

• The Fully Electronic application will send an email invitation to the client and the client will click the link in the email to complete the application online themselves. If the Fund Manager user is also an authorized representative of the hedge fund, they can send the fully electronic application to themselves.
• The Semi-Electronic application will be completed by the Fund Manager. At the end of the application, the Fund Manager will generate a PDF of the application and the agreements and disclosures and provide the PDF for the client to sign and return to Interactive Brokers.

If the Fund Manager would like to manage certain client assets separately instead of within a pooled investment vehicle such as a hedge fund, they can also add Separately Managed client accounts, or SMAs, underneath their master account structure. To do so, click the blue Add Account button on the Home page and select SMA Account. The Fund Manager will be presented with the same two application types.

If the Semi-Electronic application is selected, the Fund Manager will be redirected to the account application page that they can electronically complete for their client. Once the application is completed, the Fund Manager will send the application PDF to the client for their signature.

If the Fully Electronic application is selected, the Fund Manager will be prompted to enter the client’s name and email address to send the application to. It will also ask whether to use a Client Account Template. If Yesis selected, a dropdown menu will appear with the Fund Managers pre-configured templates. Client Account Templates are managed within the Settings page of the Hedge Fund Portal.

Depending on the Fund Manager’s registration or applicable exemptions, they may be allowed to charge fees to their SMA clients. The Fund Manager can use a pre-configured Fee Template, or they can click Continue to enter the fee schedule. Please see our website for more information on charging client fees through IBKR.

The Fund Manager can select Continue once more and they will be presented with a review screen to ensure the information entered is correct. When ready, click Continue again and the email with the application link will be sent to the client.

The status of pending applications can be monitored on the Home Page within the Client Pending Items box. The Fund Manager can click the blue Incomplete link for more information on which tasks still need to be completed.

When an account application has been approved and opened, it will be reflected under the Recent Activity tab which displays any client funding and application activity from the past five days. If no activity has occurred, a message to that effect will appear.

Once the sub-trading accounts are open, they may be funded, and the Fund Manager can begin trading. Please see our course on Trader Workstation (or TWS) to get started with the trading platform.

Resources

Hedge Fund Welcome Center

Client Applications User Guide

Advisor Fees Overview