22 Nov 2022 in financeiro

Trading Authorization Agreement

As an investor, you most likely have a trading account with a broker. However, in some instances, you may need to grant someone else access to your account to make trades on your behalf. This is where a trading authorization agreement comes into play.

What is a Trading Authorization Agreement?

A trading authorization agreement is a legal document that allows someone else to make trades in your trading account on your behalf. This agreement gives the authorized person (usually a financial planner or advisor) the power to execute trades in your account, buy and sell securities, and manage your finances.

Why Do You Need a Trading Authorization Agreement?

There are several reasons why you may want to have a trading authorization agreement in place. Here are a few examples:

1. You are too busy to manage your investments yourself and want a trusted professional to handle them for you.

2. You are going on an extended vacation and want someone to manage your investments while you are away.

3. You have a disability or illness that makes it difficult for you to manage your investments.

4. You want to give someone else the authority to manage your investments in case of an emergency.

Whatever the reason, a trading authorization agreement is an effective way to ensure that your investments are being managed according to your wishes.

Things to Consider When Signing a Trading Authorization Agreement

Before signing a trading authorization agreement, there are a few things to consider:

1. Trust: Ensure that you trust the person you are granting trading authority to. It is essential to choose someone who has the knowledge, expertise, and integrity to manage your investments.

2. Scope of Authority: The agreement must specify the scope of the authorized person`s authority. This may include the types of securities that can be traded, the size of the trades, and any other restrictions.

3. Termination: Make sure the agreement states how the authorization can be revoked and how it will be communicated.

4. Fees: If the authorized person charges a fee for their services, ensure that the agreement specifies the fee structure and any other associated costs.

In conclusion, a trading authorization agreement is a powerful tool that can help you manage your investments effectively. However, it is essential to carefully consider the terms of the agreement before signing it and to only work with trusted and reliable professionals.