Managing Stock Portfolios.

#1
Dear Members,

I am a Technical Analyst and have been engaged in trading on Indian Stocks for some time and doing pretty well.Recently few of my friends have approached me to handle their Stock Portfolios which I have never done before.
Could somebody help me in furnishing the the details and legality of managing Stock portfolios .

I want to be sure about legal boundaries before I make commitment to my pals.

Thanks in Advance.
 

SavantGarde

Well-Known Member
#2
Hi StockAnalyst,

In Short If You Did Portfolio Management It Would Be Deemed Illegal...
....Because
a) Requires SEBI Registration
b) ...And You Are Limited To A Minimum Portfolio Size Of 5 Lacs Per Client

Now Coming To My Personal View....

i) Does It Mean That For Those Who Do Not Have 5 Lacs For PMS....Isn't Their Need For Money More, Than Those Who Have 5 Lacs.

A Few Things To Skirt The Illegality Is As Follows....

1) Get A Proper Authorization To Trade On Client's Behalf

2) Work Out A Verbal Agreement As To How Much You Would Earn From Your Service For Handling Your Client's Portfolio... (Nothing On Paper)

Now The Question That May Arise In Your Mind... Is What If The Client Refuses To Pay Your Fees In Absence Of Any Written Agreement

Very Valid Question...

Look At It Like This.... If You Are Doing An Outstanding Job Of Handling The Portfolio....Then Even A Most Miserly Client Will Pay Your Fees... Considering He/She Will Not Want To Kill The Goose That Lays Gold Eggs...Get My Point...!!!


Happy & Safer Investing

SavantGarde

Dear Members,

I am a Technical Analyst and have been engaged in trading on Indian Stocks for some time and doing pretty well.Recently few of my friends have approached me to handle their Stock Portfolios which I have never done before.
Could somebody help me in furnishing the the details and legality of managing Stock portfolios .

I want to be sure about legal boundaries before I make commitment to my pals.

Thanks in Advance.
 
Last edited:

bunny

Well-Known Member
#3
Sir,

Can one person give a letter of authorization to other person to trade his account? If so, is this merely a personal but legally binding arrangement?
 

Taurus1

Well-Known Member
#4
Sir,

Can one person give a letter of authorization to other person to trade his account? If so, is this merely a personal but legally binding arrangement?
Yes, every broker has the form. Lots of people trade on behalf of their spouse/relation/other.
 

SavantGarde

Well-Known Member
#5
Hi Bunny,

Trading On Somebody's Behalf With An Authorization Letter Doesn't Require SEBI Registration.

While Handling PMS One Will Need To Follow All The SEBI Guidelines In Addition To Registration.


Happy & Safer Trading

SavantGarde

Sir,

Can one person give a letter of authorization to other person to trade his account? If so, is this merely a personal but legally binding arrangement?
 

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