Legal agreement between a Stock Trader and Trading account holder
2 years ago
I am an individual Stock Market and use to trade in others(my clients) trading account through an API based software by their consent on their behalf. We share profits generated by me in a proportion mutually agreed.. Now, just wanted to undergo and furnish a legal agreement between me and my client authorising me to execute all the trading activities on his behalf by sharing his trading accounts login credentials through an API based software called"AutoTrader". My questions are: is there violation of any law governing this type of activities, or against any SEBI/ Financial Markets regulations/ licensed? If yes then what is solution? What kind of agreement executed, notarized/registered/ digitally e-signed documents? Also guide for the best drafting for the same?
Since you are accessing somebodies elses trading account which can be termed as cybercrime at any point of time hence you must have sufficient documents to prove that whatever you did was with the valid consent of the account holder.
Vaidehi Samant
Responded 2 years ago
A.As per my knowledge such agreement is an Memorandum of Understanding or a contract between you and your client in your respective individual capacity wherein you are taking written consent of your client to operate their trade accounts on their behalf based on terms and conditions mutually agreed which more or less is matter between you and your client and regulatory authority like SEBI does not come into picture in this.
If you want to execute such agreement you will have to execute it on atleast Rs 500/- stamp paper taken in your name and draft the agreement stating accurate terms and conditions in detail and get it signed with two witnesses also signing and you may get it registered or Notary which is completely up to you. As the agreement does not involve immovable property and is an Memorandum of Understanding so it is not compulsory to register the same.
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