I do trading intraday and have friends who cant do trading on daily basis and they are ready to transfer the money into my account so i cant trade on there behalf .
My question are
1)I dont want them to transfer money to my account rather would prefer to trade from there own demat account (this avoids risk /brokerage/IT tax /account managment to me ) .but how to do it ?? since there are more than 100 people who want me to trade how can i place single order so that all my friends/client order automatically gets executed in one click of same qty of what what i buy ?
2)since i act broker to them what are the license i need to register , i want things to be legal way since market is superior and dont want to take risk of friends money and clearly signed an agreement of risk involvment to them
3)is opening an subbroker indivudual account and creating new demat accounts for all my friends and grouping them into single group and do i execute the trading order ? in this case will the money be in there demat account or mine? deposit and withdraw will be in there control or mine ? if withdraw will be in there control then i will be charging some 20% n profit what they have earned , does this business model looks legal and good ??
The only legal and compliant way of doing this is by either getting a PMS license or starting a hedge fund. Becoming a sub-broker and trading on behalf of people and then having a revenue share on profits isn’t being compliant to regulations. You can’t collect money in your name too.
And even if you get licence of portfolio manager rule is that you can not hold more futures contracts value than ur total value of portfolio.
So miminum investment of 25 lakh would buy around 5 contracts.
If u are trading in cash brokerage and taxes would kill you if you are day trading and yes cash segment volumes are too low to trade huge intraday size.
U can not place amo orders in cash segments so you have yo manually open each account using username pass and 2 fa and pur orders and same way track them.you have to logout everytime you want to check different account.imagine doing this for 100 account .
Hedge fund
It requires minimum 20 carore aum and minimum 1 caror per client.cmpliance cost and procedures are killing.
You may pool money in single account and trade whatever you want to buy collecting 20 carore takes years and solid proven track record with quality accounting practices.
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