4 min read · Oct 12, 2022
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Figuring out whether you are a professional or non-professional subscriber can be very confusing. Even if you are an individual trying to access market data, or an app developer displaying data in front of users, it’s critical you understand the difference — you do not want to be fined or penalized for breaking any rules.
In this article we’ve highlighted the main policies and standards every trader, investor, fintech CEO, and app developer should be fully aware of.
Simply put, a professional subscriber is any individual who uses stock market data for anything other than personal, non-business use. Knowing whether you, or your users is a pro is crucial.
Not entirely sure if you or your users are a professional subscribers? Well, if you answer “yes” to any of the following statements, you’re considered a professional subscriber.
- You are currently registered with the SEC.
- Your account is opened as a business or other entity.
- You are currently qualified with the CFTC.
- You are currently registered or qualified with any securities agency, exchange, association, or regulatory body.
- You are currently registered or qualified with any commodities or futures contract market, association, or regulatory body in the United States.
- You are located within or outside of the United States and you perform functions that are similar to those that require an individual within the U.S. to register or qualify with the SEC, the CFTC, any other securities agency, any other securities exchange, securities association, securities regulatory body, or any commodities or futures contract market, association, or regulatory body.
- You are engaged to provide investment advice to any individual or entity.
- You are engaged as an asset manager.
- You use the capital of any other individual or entity in the conduct of your trading.
- You entered into any agreement to share the profit of your trading activities or receive compensation for your trading activities.
- You receive office space and equipment or other benefits in exchange for your trading work as a financial consultant to any person, firm, or business entity.
- You conduct trading for the benefit of a corporation, partnership, LLC, tax-exempt organization, trust, or other entity.
Again, if any of those statements are true for your case, we highly recommend you fill out your data vendor related forms properly, or you will be penalized for selecting the wrong status.
Intrinio has been working with stock exchanges, major vendors, and data users for over a decade. We help our clients navigate these complex forms to ensure they are in compliance and safely accessing data.
A non-professional subscriber is any individual who collects stock market data exclusively for their personal use and not any commercial purposes. In addition, non-professional subscribers are not:
- Registered or qualified in any capacity with the SEC, the Commodities Futures Trading Commission, any state securities agency, any securities exchange or association or any commodities or futures contract market or association.
- Engaged as an “investment advisor” as that term is defined in Section 202(a)(11) of the Investment Advisers Act of 1940.
- Employed by a bank or other organization exempt from registration under federal or state securities laws to perform functions that would require registration or qualification if such functions were performed for an organization not so exempt.
If you are a day-trader, you may qualify as a non-professional subscriber provided that you’re administering your own money and:
- Are not assisting anyone with investment decisions or sharing profits.
- Are not receiving office space and equipment in exchange for her/his financial work to a firm.
- Has not entered into a profit-sharing agreement with an organization.
If you are building any type of investment app or research tool, these rules apply to you as well.
If you are integrating and displaying any data sets that require different treatment for pros and non pros, you will need to build systems to track and verify who your users are. You’ll be required to report these statistics back to the data vendor.
If you plan on scaling up and serving thousands of users on your app or software, the administrative burden of reporting subscriber status will become extremely costly. Consider working with a minimally restrictive data provider like Intrinio from the get-go, so that when things get burdensome you don’t have to re-engineer your platform.
Subscriber status is just one nuance in the complex world of financial data. You’ll also need to make sure you are following exchange rules and guidelines, paying any applicable exchange fees, display fees, per user fees, and referencing your data provider on your website if they require it.
At Intrinio, we’ve made getting market data for your company easier than ever, and we can help you navigate all of these challenges.
Intrinio is a leading full-service financial data provider with more than a decade of experience in the stock market data space. We know the rules like the back of our hand and proudly offer affordable, long-term data solutions, along with state-of-the-art technologies, and a vast number of resources designed to get your platform running smoothly.
If you’re building an innovative application, send us a message today — we would love to work with your company!
Let’s build the future of finance together.
