uTrade AlgosA minor cannot enter into a contract with a stockbroker to buy or sell securities since they are not legally eligible to engage in trading activities. As a result, a minor cannot actively trade or purchase securities in their trading account.
However, a trading account can be opened in the minor’s name, but only for the limited purpose of selling securities that the minor has legally acquired through:
- Investment in IPOs
- Inheritance
- Corporate Actions (such as stock splits, dividends, or bonus shares)
- Off-market transfers, including:
- Gifts or donations
- Transfers between family members
- Implementation of government or regulatory directives
Restrictions on Buying and Selling in a Minor’s Trading Account
- Buying of securities is not allowed in a minor’s trading account.
- Selling is permitted, but only for securities already owned by the minor.
- Intraday trading, derivatives (F&O), margin trading, and speculative trading are strictly prohibited.
- The guardian manages the account until the minor reaches adulthood.