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What is Trading Authorization?

April 26, 2017Authorization brokerage power of attorney trading

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What is Trading Authorization?

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A trading authorization is a document that allows a third party to conduct transactions on behalf of the owner of an account. The text of the trading authorization defines the type of actions the third party may take on behalf of the account owner. Depending on the application, a trading authorization may provide the third party will full access to the assets of the account. In other situations, the authorization may be limited to specific types of transactions as defined in the text of the document. There are essentially two types of trading authorizations. The first is known as a full trading authorization. This approach normally provides the third party with the ability to buy and sell securities included in the account in question. The third party may also remove assets from the account without having to consult the owner. A limited trading authorization provides the third party with the ability to perform on specific types of transactions on behalf of the account owner or owners.