I collect money from my clients and trade in Stocks and options .At the end of month we will sharte profits. I want to legalize it by registering as a LLP or Company . Please advice me on this.
These are very small accounts and total money is about 5lakh .
What are the ways i can continue this business legally?
Get a PMS license or an Investment Advisor from SEBI. These are the best available options.
PMS license would mean that minimum 25lks per client, and the funds stay in clients account. You get a right to place trade on his accounts, but you will be able to trade F&O only to hedge and not take naked trades.
Investment advisory would probably make sense, but you are not allowed to take money from clients to invest/trade.
Unfortunately, there is no way for you to do what you are doing presently legally. The only way is either through mutual funds or by running a hedge fund. But the entry barrier for both of these are pretty steep. You need to be worth 50 crores to get a MF AMC license and minimum ticket size is 1crore/client in case you decide the AIF (hedge fund route).
Thanks a lot for the answer Mr. nithin. I’m very passionate about trading and im good at it with a probability of 80% for past year, every business model in stock market industry in india is mostly regarding investing. Do u think the industry trends of stock market in india will ever have much share of trading , i mean professional trading like US ?
Is this still not possible ? I am hoping rules might have changed.
Or are there any other possibilities to do this ? like taking loans from clients/people as a company or individual ? like investment into the company/individual from clients/people ?
If I’m not wrong rules, still the same but many do this Illegally here in our country (even Nithin mentioned he use his mom’s account before turning 18). By managing other accounts with their money to get profit share out of it. The legal way is as Nithin mentioned, a tedious process.
Totally same problem.
I want to manage clients funds of less amount (some lakhs ) and less minimum entry price (like 50k).
Too bad SEBI don’t want people earning money legally like this.
Hedge fund is too big for guys starting out and to manage simple people’s money and not just HNIs.
There should be mini hedge fund or something.
otherwise SEBI sucks.