Paper trading companies conducting evaluation where upon passing the evaluation to issue loans as funding

[nithin]

@Kushal_Kush

my question is will i still be in the grey area while executing this business

Dark grey.

@Kushal_Kush

do i need any kind of registration to be done apart from an AP because i am not provide any direct buy/sell to traders nor am i trading on their behalf, we are just providing a knowledgeful journal about their trading history

You can’t get into this like that POA or block people from withdrawing money to their accounts. Lending money as an AP is also not allowed by SEBI.

@Kushal_Kush

do i need to register as a NBFC if i do provide loan in the companies name

You will need NBFC to lend, but NBFC can’t lend money for F&O, intraday trading, etc.

@Kushal_Kush

can we have an option for an AP where he can convince the broker to set a certain amount as margin call or have his client to stop trading after a certain percentage of loss reached in their account with broker

A customer could request the broker, but it is hard for a broker today to customize this. The risk management rules are set at the overall level, so will be hard to customize unless it is a very small broker.

Maybe you can check this thread.

Trading with other people’s money

https://zerodha.com/z-connect/rainmatter/trading-with-other-peoples-money This post talks about how you can manage money for others legally and also some grey ways wealth management is done.

Trading with other people’s money